Article date: 4 May 2006
- Unique inflation protected guarantee boosts sales by44%
Norwich Union’s with-profits sales haverisen sharply since the launch of its Inflation ProtectedGuarantee.
In the nine weeks since launch on 30 January2006, with-profit sales through financial advisers and offshorechannels totaled £108m – 44% higher than the same period in2005.
The guarantee - launched on 30 January 2006 -protects customers’ original investments and tracks theRetail Price Index (RPI). The guarantee means that investors whokeep all their money invested for at least five years will eitherbenefit from the growth in the with-profit fund or get back atleast what they paid in – plus inflation. Offshore investorswill track a different inflation index (see notes to editors).
The strength of the with-profit fund enablesNorwich Union to offer this valuable guarantee, which is availableat no extra charge to investors.
Mike Kirsch, commercial director at Norwich Union, said:“We were confident that the Inflation Protected Guaranteewould prove popular with our customers and the sales figures backthis up.
“It’s a win-win scenario for the investors. It meansinvestors can benefit from growth in the With-Profit fund andguarantees that after five years their money is protected in realterms. The guarantee has proved particularly popular with offshoreinvestors.”
The Inflation Protected Guarantee is available through thePortfolio bond and offshore bonds. It applies to money held in thefund for at least five years and moved out in full on anysubsequent date. Early exit penalties may apply if money iswithdrawn from the bond before the 5th anniversary.
The offer is available for alimited time only. Any withdrawals mean the amount guaranteed isreduced in proportion to the number of units cancelled.
Press office contacts:
David Gwyer 01904 452828
07800 699508 (Out of hours)
James Evans 01904 452791
07800 699525 (Out of hours)
Notes to Editors
How the Inflation Protected Guarantee mightwork
This example shows how the guarantee might work over aseven-year period
|Example 1||Example 2|
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 doesn’t apply
About the Retail Prices Index (RPI)
RPI is a measure of inflation. It is measured by taking a largenumber of prices, working out how much each price has changed andthen weighting the price changes according to their importance.Norwich Union will use figures published by the Office of NationalStatistics.
If offshore bond investors are investing in dollar or eurofunds, the guarantee will be linked to an appropriate index.
About the Norwich Union Portfolio investment bond
The Norwich Union Portfolio bond offers a flexible way to investfor growth or income. Its minimum investment is £5,000 andinvestors can choose to put their money in a selection of fundsincluding with-profits, equity, distribution, property, bonds andcash, which are run by Norwich Union and other fund 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.