Norwich Union launches new tranche of Guaranteed Growth Plan

Article date: 21 October 2004

Norwich Union is to launch a second tranche ofits Guaranteed Growth Plan.

The plan guarantees a minimum return of 20%regardless of what happens to the FTSE 100. It was first launchedin July and proved so popular with customers and IFAs that NorwichUnion will launch a second tranche on 1 November 2004.

The Guaranteed Growth Plan has been designed toprovide a return after six years of either 20% of theinvestor’s original premium, or 60% of the growth from theFTSE 100 (averaged over the last six months of the plan), whicheveris higher. (See notes to editors).

The plan is a six-year single premium productand will be available for six weeks from 1 November 2004. It can beheld as a direct investment or held in an ISA, or as a PEPtransfer, and the minimum investment is £3,000.

It will be distributed by IFAs and throughbuilding societies by Norwich Union’s partnership salesnetwork. The offer closes on 10 December 2004.

Neil Davies, head of investment productdevelopment at Norwich Union, said: "The Guaranteed Growth Plan hasbeen very popular with customers because, if the plan is held forits full term, they will see their money grow whatever happens tothe FTSE 100. They like the idea of a minimum return even if thestock market falls, and the possibility of an even better return ifthe stock market does well."

He added: "IFAs like the plan because two layersof protection make up the guarantee; most rival products offer onlyone layer of protection and are more risky. It is also simpler thanmany other structured products on the market."

Full details of the guarantee and how it appliesare detailed in the key features document which is available fromNorwich Union. The guarantee does not apply if the plan is cashedin early. If the plan is cashed in early, the customer may get backless than the amount they invested.


Press office contacts:
David Gwyer01904 452828 Out of hours 07800 699508
James Evans 01904 452791 Out of hours 07800 699525
Rob Pell 01904 452659 Out of hours 07800 699563
Louise Soulsby 01904 452617 Out of hours 07800 699526

Notes to Editors
About Norwich Union’s Guaranteed Growth Plan
TheNorwich Union Guaranteed Growth Plan will be a six-year singlepremium product available as a direct investment, ISA or PEP ISAtransfer. The minimum investment is £3,000. At maturity the plan isdesigned to return the higher of: 20% of the capital invested or60% participation in the FTSE 100, with unlimited growth potential.The final valuation of the FTSE 100 will be based on the last 6months of the term, with the final value averaged daily over thatperiod. Full details of the guarantee and how it applies are asdetailed in the Key Features document which is available fromNorwich Union.

How the Guaranteed Growth Plan works
Example: Index falls 25%

Start date Index level: 4000 (£10,000 premium)
End date averaged Index level: 3000
Loss over the 6-year term = 25%
Return on maturity = 20% (£12,000 maturity)

The value of the FTSE100 over the 6-year period falls therefore120% of the original investment is returned.

Example: Index rises 25%
Start date Index level:4000 (£10,000 premium)
End date averaged Index level: 5000
Growth over the 6-year term = 25%
Return on maturity = 20% (£12,000)

Return is greater of 20% minimum return (plus return of capital)or 60% of 25% of index’s growth, therefore the return is20%.

Example: Index rises 40%
Start date index level:4000 (£10,000 premium)
End date averaged index level: 5600
Growth over 6-year term = 40%
Return on maturity 24% = £12,400

Return is greater of 20% minimum return or 60% participation in40% of the index’s growth, therefore return is 24%.

About Norwich Union

  • Norwich Union is the UK's largest insurer. It is the UK'slargest provider of life, pensions and investment products andone of the leading IFA providers. IFAs provide around 75% of thecompany's long-term savings business in the UK.
  • Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco PersonalFinance and The Royal Bank of Scotland Group.
  • Norwich Union’s news releases and a selection of imagesare available from Aviva's internet press centre at

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