Canada Life customers set for pounds 2,200 windfalls

MORE THAN 100,000 British policyholders of Canada Life will realise windfall gains worth on average pounds 2,200 each following a decision to float the insurer on the Canadian stock exchange.

The Toronto-based insurer yesterday said it planned to demutualise after 36 years as a mutual company, distributing a surplus of C$2.6bn (pounds 1.1bn) to eligible policyholders.

Half a million policyholders worldwide are entitled to a share of the surplus, giving each an average of C$5,200, or pounds 2,189 at current exchange rates. The insurer is expected to pay out almost all of the surplus.

Policyholders are likely to have to wait until 1999 before they receive a windfall. The Canadian government is expected to pass legislation to allow demutualisations by the autumn. It is then expected to take several months before the float can go ahead.

David Nield, chief executive of Canada Life, said: "In today's world of rapid change and globalisation, we believe that, as a publicly traded stock company, Canada Life will gain the financial flexibility necessary to compete aggressively."

The company said the planned flotation was in line with its strategy of snapping up smaller insurance companies as the industry consolidates into fewer, larger companies. In the last five years the company has made eight acquisitions. Three of them - ManuLife, Windsor Life's sales force, and Albany Life - have been British. The company has also bought a number of US insurers and was this year granted permission to open an office in China.

Mr Nield said: "Canada Life's strategic direction calls for bold growth and expansion. The new capital we can raise will allow us to grow more rapidly, both internally and by continuing our acquisition strategy. We intend to use our proven acquisition expertise to undertake more and, perhaps, larger, transactions."

Up to 3 million people in the UK are members of Canada Life schemes and it has 750,000 policyholders in the UK. However, only those with with- profits policies are entitled to a windfall.

Around 100,000 British customers have with-profits policies. The size of the windfall they receive will depend on the length of time they have held the policies and the amount of money they have committed.

Windfalls are expected to take the shape of shares, though some policyholders will be entitled to cash.

Canada Life manages pounds 20bn of investments and employs 4,050 staff, specialising in group life, health and disability insurance.

It is the oldest insurer in Canada and has been selling policies in the UK since 1906. It is one year older than the Prudential, which yesterday celebrated its 150th anniversary.

The company has only been mutual since 1962, when it was bought by its policyholders at the urging of the Canadian government. Canada was worried at the time that its best insurance companies would be gobbled up by US predators.

Sun Life of Canada, which stopped being a listed company at the same time, is also seeking to switch back to its old status.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
Fifa corruption: Strip Qatar of the World Cup? Not likely

Strip Qatar of the World Cup? Not likely

But if a real smoking gun is found, that might change things, says Tom Peck
Twenty two years later Jurassic Park series faces questions over accuracy of the fictional dinosaurs in it

Tyrannosaurus wrecked?

Twenty two years on, Jurassic Park faces questions over accuracy
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
Genes greatly influence when and how many babies a woman will have, study finds

Mother’s genes play key role in decision to start a family

Study's findings suggest that human fertility is still evolving
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
England can win the Ashes – and Elvis Presley will present the urn

England can win the Ashes – and Elvis will present the urn

In their last five Test, they have lost two and drawn two and defeated an India side last summer who thought that turning up was competing, says Stephen Brenkley
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)