In the past five years, the company has:
rFaced heavy fines by the financial industry's regulator
r Been forced to pull its entire sales force off the road because they were not up to scratch
r Lost a packet through overexposure to the commercial property market.
Despite its sorry record, experts still believe Norwich Union has the potential to expand and compete effectively in the world insurance markets.
Norwich Union, first established in 1797, is now the second-largest mutual with assets in its life fund of more than pounds 25bn. Unlike most other mutuals, it has diversified in the past few years into general insurance and private medical health.
Its growth over the past 10 years has been explosive, fuelled in part by the boom in sales of personal pensions, with-profits endowments to mortgage borrowers, and a range of other life products and investments. But in recent years its success has been at the cost of mistakes that have cost the company heavily.
Throughout the 1980s, Norwich Union's investment strategy banked heavily on the existing boom in commercial property. At one stage, some experts claim, up to 30 per cent of its portfolio was in that area. When the market crashed, NU was forced into rapid reverse, divesting itself of its loss- making investments.
Although the company says that its weighting is now below 10 per cent, this is still high by life industry standards.
Solvency has also been a problem, compounded by the company's foolishly large sales of with-profits bonds - contracts that impose a substantial financial strain because it is forced to match its assets to meet future potential liabilities.
The company was forced to abandon a market it had dominated and to switch enormous funds into government securities. In March last year, it was forced to pull 800 sales staff off the road after they were found to be too poorly trained. A month later it was fined pounds 300,000 by its watchdog for a series of regulatory failures.Reuse content