Norwich Union changes term assurance premiums

Article date: 9 June 2003

Norwich Union announced today that it is changing the premiumson its term assurance and term assurance with critical illness (CI)policies with effect from 16 June 2003. As a result of an increasein reinsurance rates new policy premiums for term assurance willrise by an average of 5% and premiums for term assurance with CIwill rise by an average of 18%. Existing policies already in forceare not affected by these changes.

Willie Mowatt, director of product development at Norwich Union,said: “These premium rises reflect the increase in the costof reinsurance. To enable Norwich Union to continue to offerguaranteed premium critical illness policies we need to adjust theprices. We have not increased term assurance premiums for two yearsand have held these premiums for as long as possible in the currentclimate.

Currently, the critical illness market is extremely competitiveand we are seeing much turbulence in its pricing. Existingapplications from customers will be honoured at the quoted premiumrates.”

All IFAs and introducers are being notified today regarding thechanges.

Norwich Union will honour quotes at current rates, subject tonormal underwriting, provided the proposal and a valid quote* arereceived by Norwich Union by 15 July 2003.

Example premiums:

Male, non smoker, age 35 next birthday, 25 year term,
sum assured £50,000

 Pre 16 JunePost 16 June
Term assurance with critical illness£22.20£26.25

Female, non smoker, age 35 next birthday, 25 year term,
sum assured £50,000

 Pre 16 JunePost 16 June
Term assurance with critical illness£20.05£23.00

Male, non smoker, age 40 next birthday, 20 year term,
sum assured £50,000

 Pre 16 JunePost 16 June
Term assurance£8.15£8.55


Press office contacts:

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James Evans08703 66 68 7807790 487105
Lorna Wiltshire  08703 66 68 7807788 471849
Louise Goffee08703 66 68 7007810 057362
Ian Beggs08703 66 68 7107790 487533

Notes to editors:

Norwich Union is the UK’s largest insurer. It is a leadingprovider of life, pensions and investment products and one of theleading IFA providers. IFAs provide around 70% of thecompany’s long-term savings business.

Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group.

Norwich Union’s news releases and a selection of imagesare available from Aviva's internet press centre at

The average increases quoted depend on the age, sum assured andother relevant underwriting criteria. Term assurance with criticalillness premium rates were last increased on 9 December 2002. Ratesfor Mortgage life insurance (MLI), MLI with CI and stand alone CIwill not be affected. Proposals submitted to Norwich Union beforethe 15 June will not be affected.

Guaranteed critical illness : Guaranteed rates for criticalillness are rates that do not change for the term of the criticalillness contract. This is different to renewable rates that can bereviewed after the critical illness policy has been taken out.

Reinsurer: Reinsurers are third parties to whom insurancecompanies sub-contract part of an insurance risk, or an entire bookof business. This risk can include both capital andmortality/morbidity.

* Valid quote: A quote dated from 17 May 2003 until 15 June 2003must be submitted to, and received by, Norwich Union with theapplication form by the 15 July 2003 to obtain the currentrates.

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