Norwich Union With-Profits Stakeholder

EdInvestor

Retired_I.F.A. wrote: »

Carpetbaggers were out for a quick profit and got it at the expense of many millions of policyholders

Nah, most lifecos had demutualised before they came onto the scene.( Scot Mut, Clerical Medical, Norwich Union, Widows had all gone before the Standard Life campaign started and FP was about to go ). These were all done by the management to raise new capital as they had already paid out the estate by doing all that overbonussing.

It's incredibly unfortunate that Fred Woollard's campaign at SL failed so narrowly in 2000 - policyholders would have been massively better off if it had succeeded. Bizarrely it was one of the few mutuals at the time that didn't need to DM.

Fast forward to 2003 and due to unbelievable management incompetence, it was forced to do exactly that, having lost almost all the With profits fund's free assets in a stockmarket punt in the interim.

One of the worst management performances since Marconi.

Retired_I.F.A.

The overbonusing going on though cost next to nothing. Standard life and Scottish Widows had for years shared the top two spots with Standard having the edge and they started to push the fact with brokers more and more so with sales aid litrature showing their consistency. When MIRAS came about the Standard Life quote and bumph was in every salesmans briefcase even mine as a life inspector fo Colonial Mutual at the time,. it had to be, as going halves with a broker was far better than waiting for the solicitor or the building society to step in and churn it.
With the boom of sales stemming from MIRAS Standard Life liked their share and then started to anounce the yearly bonus rates only after every other company had thus ensuring they were top of the league. It cost them peanuts as what they actually paid out on maturities was less than one months premiums.coming in from one small town. No the payouts were not really over the top they were within what the investment had yieled as from then on the managed unit linked fund was never far behind I doubt very much they even scratched at the reserves meant to smooth returns. The reserves got bitten into by the advertising costs as they went on tv every night and by paying the building societies twice what they paid the broker all in the attempt to maintain market share. Mutuality and with profits had started on it's downward path. the day MIRAS was introduced. And then came the misselling compensation claims, they were the nails in the coffins.

As for the demutulisations, they were led by the banks the biggest carpetbaggers on earth. Abbey National demutualised and became a bank solely so they could borow money and lend it on mortgages as building societies at the time could only lend that which had been deposited with them and they simply did not have the funds to meet the demand. They bought Scot Mut simply because they wanted more commission and like alll lenders were told enough is enough by the insurance companies, if you want moe start your own company up and write your own charges in the plans.. So they bought Scot Mut. Nat West did likewise, they half heartedly started a joint venture with Clerical then when up and running bought them out completely and the countries biggest IFA at the time overnight became Nat West Life. The ball was rolling and gaining pace with Lloyds buying the Widows and the C+G. and on it went. None of this was in the interests of policyholders it was all in the interests of getting more out of them to line the shareholders pockets and the directors bonus's.
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