Norwich Union's latest offer to distribute £2.3bn in accrued excess assets to more than a million policyholders and shareholders has been dismissed as tight-fisted by consumer group Which?.
Some £5.4bn in inherited assets – surplus money held back in boom periods from with-profits funds to allow consistent returns to be made to investors in harder times – is currently held by the company.
Government guidelines dictate that this surplus should be distributed between policyholders and shareholders in a 90:10 ratio. But although this ratio is upheld in the Norwich Union offer, less than half the sum is earmarked to be returned to customers
"In our view, Norwich Union has no justification for holding on to this money a moment longer," said Dominic Lindley of Which?.
The consumer group is concerned that the payment could be phased over three years. And there is uncertainty about the company's plans for the remaining £3.1bn.
But a spokesperson for Norwich Union defended the offer, saying the remaining billions were required to ensure the future value of the with-profit bonds. "We think this is a fair deal. If we were to pay the remainder out to policyholders, we would not be able to continue investing in new business etc."