With-profit fund offers double guarantee

Article date: 25 January 2006

  • Market-leading feature protects against stock marketfalls and inflation

Norwich Union is tointroduce a new inflation-protected guarantee for with-profit fundinvestments made in the Portfolio investment bond after 30 January2006.

This unique guarantee protects customers’ originalinvestments and tracks the retail price index (RPI). The guaranteemeans that investors who keep all their money invested for at leastfive years will either benefit from the growth in the with-profitfund or at least get back at least what they paid in – plusinflation. Offshore investors will track a different inflationindex (see notes to editors).

The strength of the with-profit fund enables Norwich Union to offerthis valuable guarantee. The guarantee is available at no extracharge to investors.

Mike Kirsch, commercial and marketing director at Norwich Union,said: “This is a great new feature that should appeal tocustomers because it allows them to benefit from potential growthin our with-profits fund while protecting the value of theirinitial investment. It means that customers who remain fullyinvested for at least five years will get their money back in realterms regardless of what happens to investment markets andinflation.

“Customers tell us that they want guarantees that protect thereal value of their investment. This new feature demonstratesNorwich Union’s commitment to with-profits and we know of noother provider who offers a guarantee like this.”

The inflation-protected guarantee will be available through thePortfolio bond and offshore bonds after 30 January 2006. It appliesto money held in the fund for at least five years and moved out infull on any subsequent date. Early exit penalties may apply ifmoney is withdrawn from the bond before the 5thanniversary.

The offer is available for a limited time only. Any withdrawalsmean the amount guaranteed is reduced in proportion to the numberof units cancelled.

In addition, an extra 1% special offer allocation will beintroduced on all new investments in Portfolio until furthernotice. During the offer period exit penalties in the first threeyears will also be increased by 1%.


Press office contacts:
David Gwyer 01904 452828 Outof hours 07800 699508
James Evans 01904 452791 Out of hours 07800 699525
Rob Pell 01904 452659 Out of hours 07800 699563

Notes to editors:

How the inflation-protected guarantee mightwork
This example shows how the guarantee might workover a seven-year period.

Example 1

Example 2

Initial Premium



Value of With-Profit Fund after7 years



Increase in inflation measureover 7 years



Guaranteed amount after 7years



Value after seven years, ifinvestment is fully moved out of With-Profit Fund



Guarantee applies

Guarantee doesn’tapply

About the retail prices index (RPI)
RPI isa measure of inflation. It is measured by taking a large number ofprices, working out how much each price has changed and thenweighting the price changes according to their importance. NorwichUnion will use figures published by the Office of NationalStatistics.

If offshore bond investors are investing in dollar or euro funds,the guarantee will be linked to an appropriate index.

About the Norwich Union Portfolio investmentbond
The Norwich Union Portfolio bond offers aflexible way to invest for growth or income. Its minimum investmentis £5,000 and investors can choose to put their money in aselection of funds including with-profits, equity, distribution,property, bonds and cash, which are run by Norwich Union and otherfund managers.

  • Is simple and flexible - offering a wide choice of internaland external funds and a choice of two charging structures withina single bond
  • Has clear and easy to understand charges - explicit chargingprovides investors with a clear picture of the charges applicableto their investment
  • Offers investors the choice of income and growth funds.Investors can choose from a range of 31 internal funds as well asmore than 100 funds managed by 12 industry-renowned fundmanagers.

About Norwich Union
Norwich Union is oneof the UK's biggest insurers. It is a leading provider of life,pensions and investment products and one of the largest financialadviser (FA) providers. Financial advisers provide over 70% of thecompany's long-term savings business in the UK.

Norwich Union has strategic alliances with building societies andother leading UK brand names including CIS and The Royal Bank ofScotland Group. Norwich Union’s news releases and a selectionof images are available from Aviva's internet press centre atwww.aviva.com/media.

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