Life offices refuse to reveal their secrets: Failure to give figures prompts complaint to regulators

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The Independent Online
THERE is one notable absentee from the Money Marketing annual rankings of with-profit endowments - Scottish Equitable. Last year Scottish Equitable was ranked 27th out of 32 life offices on endowments with a net yield of 11.2 per cent against an average of 12.4 per cent.

On pensions it was placed equal fifth. This year it again makes a showing in the top 10 placings.

But it refused to provide figures on endowment policy returns, saying that it no longer actively marketed traditional with-profits policies.

MGM and Swiss Life also declined to take part and Royal Life did not complete the pensions section.

The editor of Money Marketing, Tim Potter, has written to a host of regulators including the Office of Fair Trading and the SIB asking for help to 'ensure that this trickle of secretive offices does not become a deluge'.

The Money Marketing figures are used by financial advisers not only in choosing new policies for clients but to monitor policies that they already hold, and offer advice about what to do with these policies.

'If a company refuses to give information simply because it no longer markets the product there is a suspicion that it has something to hide, such as poor performance or unfair allocation of bonuses,' says Mr Potter's letter.

Returns on with-profits policies have been cut as bonuses have been slashed to keep pace with falling investment returns. The rankings of six companies marked * in the tables - Britannia Life, Legal & General, National Mutual, Pearl, Prudential and Royal London, which are using last year's bonuses as their new ones are declared late - are likely to have enhanced rankings as a result.

Royal London, on this basis, comes out top over 10, 15 and 20 years. If terminal bonuses - the non-guaranteed top-up paid on maturity - are excluded, the top endowments come from Commercial Union over every time span, with Norwich Union and Eagle Star vying for second and third places over 15, 20 and 25 years.

The top payer over 25 years, General Accident, adds pounds 24,437 as terminal bonus to the guaranted payout. So 55.9 per cent of the payout is made up of terminal bonus. This varies from 28.6 per cent with Commercial Union to 61.7 per cent with Tunbridge Wells Equitable.

Pensions are also suffering from bonus cutbacks. For a man retiring at 65 after paying pounds 50 a month for five years the top payout of pounds 3,542 comes from Equitable Life followed by Sun Life, Scottish Amicable, Friends Provident and Scottish Equitable.

----------------------------------------------------------------- PERSONAL PENSIONS ----------------------------------------------------------------- pounds 1 Sun Life. . . . . . . . . . . . . . . . . . . . . . . . . . .1,790 2 Friends Provident. . . . . . . . . . . . . . . . . . . . . . 1,772 3 London Life. . . . . . . . . . . . . . . . . . . . . . . . . 1,713 4 Equitable Life. . . . . . . . . . . . . . . . . . . . . . . .1,706 5 Commercial Union. . . . . . . . . . . . . . . . . . . . . . .1,673 6 Clerical Medical. . . . . . . . . . . . . . . . . . . . . . .1,646 7 Norwich Union. . . . . . . . . . . . . . . . . . . . . . . . 1,626 8 Pearl*. . . . . . . . . . . . . . . . . . . . . . . . . . . .1,607. . 9 Legal & General. . . . . . . . . . . . . . . . . . . . . . . 1,600 10 Prudential. . . . . . . . . . . . . . . . . . . . . . . . . 1,597 pounds 1,000 single premium taken out by 60-year-old, retiring at 65 on 1 March 1993 ----------------------------------------------------------------- Source: Money Marketing -----------------------------------------------------------------

----------------------------------------------------------------- 10-YEAR ENDOWMENTS ----------------------------------------------------------------- The best pounds 1 Royal London*. . . . . . . . . . . . . . . . . . . . . . . . 8,566 2 Tunbridge Well. . . . . . . . . . . . . . . . . . . . . . . .8,507 3 Equitable Life. . . . . . . . . . . . . . . . . . . . . . . .8,505 4 Commercial Union. . . . . . . . . . . . . . . . . . . . . . .8,364 5 Norwich Union. . . . . . . . . . . . . . . . . . . . . . . . 8,198 6 Clerical Medical. . . . . . . . . . . . . . . . . . . . . . .8,125 7 Pearl*. . . . . . . . . . . . . . . . . . . . . . . . . . . .8,047 8 Friends Provident. . . . . . . . . . . . . . . . . . . . . . 8,033 9 Scottish Provident. . . . . . . . . . . . . . . . . . . . . .8,017 10 Standard Life. . . . . . . . . . . . . . . . . . . . . . . .8,006 Figures based on 29 year old non-smoking man paying pounds 35 a month. Payout includes terminal bonus. ----------------------------------------------------------------- Source: Money Marketing ----------------------------------------------------------------- 10-YEAR ENDOWMENTS ----------------------------------------------------------------- The worst pounds 1 GRE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,875 2 LAS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,365 3 NPI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,796 4 Royal Insurance. . . . . . . . . . . . . . . . . . . . . . . 6,883 5 Eagle Star. . . . . . . . . . . . . . . . . . . . . . . . . .7,025 6 Sun Alliance. . . . . . . . . . . . . . . . . . . . . . . . .7,026 7 Britannia Life*. . . . . . . . . . . . . . . . . . . . . . . 7,117 8 Scottish Life. . . . . . . . . . . . . . . . . . . . . . . . 7,237 9 Scottish Amicable. . . . . . . . . . . . . . . . . . . . . . 7,242 10 National Mutual Life*. . . . . . . . . . . . . . . . . . . .7,385 Figures based on 29-year-old non-smoking man paying pounds 35 a month. Payout includes terminal bonus. ----------------------------------------------------------------- Source: Money Marketing ----------------------------------------------------------------- 25-YEAR ENDOWMENTS ----------------------------------------------------------------- The best pounds 1 General Accident. . . . . . . . . . . . . . . . . . . . . . 43,679 2 Standard Life. . . . . . . . . . . . . . . . . . . . . . . .42,170 3 Commercial Union. . . . . . . . . . . . . . . . . . . . . . 41,880 4 Tunbridge Wells. . . . . . . . . . . . . . . . . . . . . . .41,858 5 Royal London. . . . . . . . . . . . . . . . . . . . . . . . 41,252 6 Legal & General. . . . . . . . . . . . . . . . . . . . . . .41,107 7 Scottish Life. . . . . . . . . . . . . . . . . . . . . . . .41,064 8 Friends Provident. . . . . . . . . . . . . . . . . . . . . .41,039 9 Clerical Medical. . . . . . . . . . . . . . . . . . . . . . 41,800 10 AXA Equity & Law. . . . . . . . . . . . . . . . . . . . . .40,685 Based on 29-year-old non-smoking man paying pounds 20 a month. Payout includes terminal bonus ----------------------------------------------------------------- Source: Money Marketing -----------------------------------------------------------------

----------------------------------------------------------------- 25-YEAR ENDOWMENTS ----------------------------------------------------------------- The worst pounds 1 GRE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29,260 2 Provident Mutual. . . . . . . . . . . . . . . . . . . . . . 30,414 3 LAS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .30,566 4 Sun Life. . . . . . . . . . . . . . . . . . . . . . . . . . 31,269 5 NPI. . . . . . . . . . . . . . . . . . . . . . . . . . . . .32,249 6 Sun Alliance. . . . . . . . . . . . . . . . . . . . . . . . 33,408 7 National Mutual Life*. . . . . . . . . . . . . . . . . . . 34,854 8 Equitable Life. . . . . . . . . . . . . . . . . . . . . . . 35,071 9 Pearl*. . . . . . . . . . . . . . . . . . . . . . . . . . . 36,099 10 London Life. . . . . . . . . . . . . . . . . . . . . . . . 36,104 Based on 29-year-old non-smoking man paying pounds 20 a month. Payout includes terminal bonus ----------------------------------------------------------------- Source: Money Marketing -----------------------------------------------------------------

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