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Zurich refuses to give details in Eagle payout cuts

Zurich Financial Services has reduced with-profits payouts for its 500,000 Eagle Star policyholders by an average of 25 per cent but is refusing to give fully detailed information.

The Raising Standards-accredited brand says it is cutting payouts but is not giving out industry-standard illustrations to show how its policies are performing compared with last year or compared with rivals.

Zurich also says there are market value adjusters in place of up to 30 per cent.

At the end of December last year and before the latest round of cuts, only 16 per cent of Eagle Star endowments were on target, with 71 per cent on red warnings and 13 per cent amber.

The payout cuts mean that even some 25-year policies will not be attracting any terminal bonus.

Zurich is writing to policyholders to explain its actions and it has set up a helpline.

Spokeswoman Erica Harper says: “We are sticking to the decision not to give performance figures. These are products that we are no longer marketing. You can draw whatever inference you want but we prefer to deal with customers directly.”

Consumers&#39 Association senior policy adviser Mick McAteer says: “It will be interesting to see what the FSA does now that firms have a duty to treat customers fairly. The FSA should review its decision not to publish endowment performance tables.”


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