With-profits funds offered by UK insurers have had a poor reputation since the near-collapse of Equitable Life, with many depicted as “zombie” funds producing poor investment returns. But, this just isn’t the case for the majority of funds. |
By Scott Eason, FIA, Partner and Head of Insurance Consulting at Barnett Waddingham Our latest research demonstrates that a large number of the funds are achieving strong returns for long-term savers. We examined over 50 funds with assets under management in excess of £100bn. The average return over 2017 was 6.22%; comfortably in excess of inflation and cash interest rates. Average equity holdings in the funds remained fairly stable at just under 30%, with the balance predominantly in bonds. Over the 5 years to 31 December 2017, the average investment return achieved was even higher at 6.85% per annum. This included an average equity performance of 11.04% after fees compared with the 10.26% achieved by the FTSE All-share index over the same period.
“The findings show that insurance companies are standing up to scrutiny to provide policyholders with good investment returns. ”
Download the full research to find out more
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