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By Kevin Crowley
Jan. 9 (Bloomberg) -- Friends Provident Plc, the 177-year-old U.K. insurer, plans to cut bonus payments to some policyholders after the value of investments declined last year.
Friends Provident will reduce payouts after the value of investments related to its so-called with-profits fund fell almost 11 percent, compared with a gain of 5 percent a year earlier, the Dorking, England-based company said in an e-mailed statement today. The company didn’t say how much the payments would be reduced.
“This bonus announcement ensures payouts from the with- profits fund more closely reflect the value of the underlying investments,” Friends Provident said.
The insurer follows Aviva Plc, Prudential Plc and Standard Life Plc, the U.K.’s three biggest insurers, which cut final bonus rates for some customers last year, citing declining values of equities, commercial property and corporate bonds.
So-called with-profits policies are meant to smooth returns over time to reduce the impact of market swings.