Winterthur - yet another endowment bonus flop

cordial

What on earth is going on at Winterthur?

For several years they have been giving out with feeble excuses for the lack of annual bonuses.

This year, knowing full well the untenable nature of the situation, they have again elected to favour their shareholders over their customers and felt it necessary to accompany the '0% regular bonus' announcement with a ramshackle mass of desperate half truths by way of 'explanation'.

Can anyone offer an explanation as to what is really happening at Winterthur, over and above the obvious i.e. that they are keeping the money for themselves?

maninthestreet

It's like that advertisement on the teleivision - they are using your premiums to buy champagne for the shareholders' meeting. I would surrender the policy in - you cant afford to put more money into this failing investment.

EdInvestor

The WP endowment problem isn't related to shareholders. It's caused partly by the fall in the stockmarket 5 years ago, partly by paying out bonuses that were too high in the 1990s, and partly by changes in solvency regulations related to guarantees. The problem is quite widespread across the insurance industry.

RainbowsInTheSpray

EdInvestor wrote: »

The WP endowment problem isn't related to shareholders. It's caused partly by the fall in the stockmarket 5 years ago, partly by paying out bonuses that were too high in the 1990s, and partly by changes in solvency regulations related to guarantees. The problem is quite widespread across the insurance industry.

Surely however it's becoming a strain on anyone's belief that firms can not restart paying annual bonuses after the terrific stock market resurgence there's been over the last few years.

I agree that the excuses are wearing very thin indeed and it's time the FSA took an interest in what appears to be a bit of a racket, even if it's not confined to one player.

EdInvestor

Unfortunately many WP funds are no longer invested in the stockmarket and thus they are not benefiting from the recovery. You should check what percentage of the Winterthur fund is in equities and property and what is in bonds and cash.

dunstonh

Surely however it's becoming a strain on anyone's belief that firms can not restart paying annual bonuses after the terrific stock market resurgence there's been over the last few years.

You have to be in the stockmarket to benefit from it.

I agree that the excuses are wearing very thin indeed and it's time the FSA took an interest in what appears to be a bit of a racket, even if it's not confined to one player.

The FSA is actually the cause of why many of them hold such a low equity content now.

RainbowsInTheSpray

EdInvestor wrote: »

Unfortunately many WP funds are no longer invested in the stockmarket and thus they are not benefiting from the recovery. You should check what percentage of the Winterthur fund is in equities and property and what is in bonds and cash.

Well, that would tend to imply that they shouldn't have been paying bonuses at almost any time in recent memory, even during the pre-2002 bull market.

Something just doesn't stack up.

How about a 'campaign', then, Martin??? Unfairness is everywhere and not restricted to banks...

EdInvestor

RainbowsInTheSpray wrote: »

Well, that would tend to imply that they shouldn't have been paying bonuses at almost any time in recent memory, even during the pre-2002 bull market.

Indeed: the combination of paying excessive bonuses in the 90s and making big losses in the market crash adds up to exactly what you are talking about.

It's sheer incompetence, I quite agree.

But it's difficult to see what can be done about it, other than to cut your losses, get out and move on.

RainbowsInTheSpray

EdInvestor wrote: »

Indeed: the combination of paying excessive bonuses in the 90s and making big losses in the market crash adds up to exactly what you are talking about.

It's sheer incompetence, I quite agree.

But it's difficult to see what can be done about it, other than to cut your losses, get out and move on.

So does the 'get out' exhortation still apply to someone like me? I am within 5 years of 'maturity' on my policy and I thought the received wisdom was for people in my position to hang on in there, virtually come what may.

Ideally I would like to get out and stop acting as some kind of monthly milk cow for these 'incompetents'.

dunstonh

and I thought the received wisdom was for people in my position to hang on in there, virtually come what may.

Thats an old wives tale put about by the tied agents of the insurance companies in question as they are not authorised by their employer to recommend cancellation of their own company products.

You should get it if its best to get out. However, dont look at the annual bonus as the only thing to consider. Look at the terminal bonus and surrender penalty as well.

RainbowsInTheSpray

dunstonh wrote: »

Thats an old wives tale put about by the tied agents of the insurance companies in question as they are not authorised by their employer to recommend cancellation of their own company products.

You should get it if its best to get out. However, dont look at the annual bonus as the only thing to consider. Look at the terminal bonus and surrender penalty as well.

Really? I'm sure I've seen 'stick with it if you're near the end' suggested by pretty well all and sundry in the past.

Are you sure the advice has now changed?