Friends Provident trims with-profits payouts
LONDON (Reuters) - Life insurer Friends Provident (FP.L) said on Friday it had trimmed payouts for its with-profits policyholders after falling financial markets weighed on the group's investment performance.
As a result of the cuts, a 30-year-old male customer paying 50 pounds a month into a 25-year policy maturing in January 2009 would receive 29,184 pounds, compared with 32,885 pounds for policies maturing in July last year, Friends said.
The insurer said the reduction largely reflected a weak investment performance by its with-profits fund, which had negative investment returns of 10.5 percent in 2008.
"2008 has been a particularly challenging year for almost all types of investment," it said in a statement.
Friends' with-profits fund performance was affected by a 33 percent decline in the FTSE All Share Index during 2008, as well as negative returns on commercial property, the company said.
With-profits funds aim to eliminate sharp fluctuations in policyholder payments by holding back a proportion of returns when times are good to smooth over periods of poor investment performance.
Friends Provident shares were up 0.3 percent at 84.4 pence by 9:58 a.m. British time.
(Reporting by Myles Neligan)
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