Norwich Union - Reattribution

dunstonh

One assumes that you are aware that last year the stockmarket dropped in value. Property prices dropped and most of the fixed interest sector dropped?

In which case, why is it that you think that NU are pocketing this money when in reality it is the asset values that have dropped?

alared

No more feeble excuses Dunny,if NU had got on with it four years ago it`ll all been over and done with long ago.

The fact of the matter is these financial products are next to useless when companies can do as they please and continually move the goal posts.

NU results are due any time now,no doubt profits will be up ,despite "market turmoil" which is exactly the excuse they`re using now for welching on the cash payment.

missile

From the horses mouth:
http://ft.fundtransfer-norwichunion.com/ve/ZZ947079Mw71UduzW1

Geoffo_M

alared wrote: »

The saga goes on as NU welches on the deal

http://news.bbc.co.uk/1/hi/business/7869112.stm

About 700,000 people were due to be offered between £400 and £1,000, and another 220,000 would have been offered a payout of between £1,000 and £3,500 if they accepted.

But the company said that falling share and property prices had eroded the surplus in its funds, making the offer "no longer fair".

I am surprised that NU allowed this offer to be affected by market volatilty. As this was part of the "inherited estate", once an agreement had been reached with the policyholder's advocate, NU should have ringfenced the payouts so they would not become affected by the massive falls in the FTSE. My distrusting nature believes they probably did do this, and are just trying to claw back more cash in a very underhand manner.

leeeroy57

Geoffo_M wrote: »

As this was part of the "inherited estate", once an agreement had been reached with the policyholder's advocate, NU should have ringfenced the payouts so they would not become affected by the massive falls in the FTSE.

The reattribution payout isn't part of the inherited estate, it comes from shareholders' funds. The inherited estate that isn't being distributed as part of the special bonus will remain as part of the with-profits funds, and isn't going anywhere.

dunstonh

NU results are due any time now,no doubt profits will be up ,despite "market turmoil" which is exactly the excuse they`re using now for welching on the cash payment.

Profitability of the company is not in question here. The assets under management are.

alared

Peter Vicary-Smith, chief executive of Which? said: "At a time when Aviva is cutting the payout to policyholders, it is all the more important that it stops raiding the inherited estate to pay shareholders' tax bills, prop up a deficit in the staff pension scheme or pay for its own regulatory failings."

http://news.bbc.co.uk/1/hi/business/7869112.stm

Enough said:mad:

azureblue_2

Dangled carrot successfully reneged. (There goes the money I'd ring-fenced for winter gas/elec bill shortfall.)

oldwiring

Not actually scrapped

Policy Holder Advocate (enail)

Dear Policyholder Since our update at the end of September last year we have beenworking on all the documents needed to go to you and to the courts toexplain the nature of the deal announced at the end of July. The financial turmoil in world markets, and in particular eventssince October, have affected the inherited estates and they havereduced significantly in value. The audited figures will not beavailable until March but we do know that the company does not believethat the fixed offer of £1 billion if everyone accepted their offerworks in today's market conditions. The company has therefore asked us to open discussion on a new way ofdevising an offer that can vary with the size of the estate. That iswhat is currently being worked on and today Clare has issued astatement commenting on matters. This is below. The Norwich Unionstatement can be found by following this link (http://www.norwichunion.com/fundtransfer ) This is complicated work but we believe that it can be completedrelatively quickly. Comment from Clare Spottiswoode CBE, policyholder advocate 'The financial turmoil we have seen since we announced areattribution deal in July 2008 has been unprecedented. In the faceof a significant reduction in the value of the estates, the fixedprice offer no longer works for the company in today's marketconditions. 'Importantly, however, the company has opened discussions with usabout how to keep the prospect of a reattribution offer alive. We areconsidering how we might be able to restructure the offer to move inline with the size of the estate at a point close to the time paymentscould be made. I am confident that we will succeed. 'I believe that it is very positive that, even in these extraordinarytimes, the reattribution remains on the agenda. Our intention in thesediscussions is to keep the other principal parts of the deal in place,namely that there will be a minimum payment, policyholders will beable to make their own decision about what to do, and if they decidenot to accept they will be in broadly the same position as they arenow against a wide range of economic circumstances.' The next stages will be to complete the technical work and to takeviews from others involved such as the independent expert and theFinancial Services Authority. It does mean, however, that, at theearliest, it is likely that any High Court hearing will be in theautumn and any payments in the early winter. Once firm decisions are taken we will write again.

And from NU
http://ft.fundtransfer-norwichunion.com/ve/ZZ74i89km31UdlK88

alared

I can only reiterate that if NU had got on with it,when they first thought it was a brilliant idea, four years ago, to grab the lion`s share of the "orphan fund" then the current payment deferment wouldn`t have arisen.

The average payment should have been £1,000 and gone ahead this summer,with policy holder receiving a cheque.
This now has to be renegotiated (downwards) and may not be agreed on at all.

NU has hardly come out of this smelling of roses after promising so much and delivering so little and taking over four years into the bargain.
And don`t forget they are getting the biggest chunk out of all this.

Their sales have just increased by 11% (old standard)and they`ve just wasted 9 million pounds on a pointless advertising campaign and no doubt their profits will be increased but they don`t want to cough up the agreed payment because "market turmoil" has eroded their assets.
Blah,blah,blah