Aegon With Profits
RWP Research Findings, Overview and Comments
Aegon owns Scottish Equitable PLC and the Scottish Equitable With Profits are the focus of our comments below.
In considering any company and its with profits RYWP will look to assess a range of factors which will include: the company’s management record; its transparency of information, its financial strength; its prospects for providing future returns and the nature of its with-profits approach.
In this regard we believe that Scottish Equitable With Profits can be described as a very mixed bag in every respect. They have some With Profits funds and investments that have done well for policyholders and some that have done poorly and, in some cases, appallingly. It depends very much on when a policy was started.
They effectively aim to manage the with profits funds on a ‘managed fund’ basis wherever they can; this means the old values attributed to with-profits (low risk, smoothing returns etc.) have largely been dropped.
We assess Aegon/Scottish Equitable as a company easy to deal with, providing transparency and they are financially strong. However in reviewing policies for Scottish Equitable With Profits investors we see a wide mix of past performance, depending on when a policy was taken out and what type of policy it is. Some past performance is very poor; some is good. There is no consistency. We recommend if you hold a With Profits policy it should be fully reviewed on its own merits to judge how it is has performed and its future prospects.
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Company ownership position
Scottish Equitable plc used to be Scottish Equitable Life Assurance Society, which was a mutual company. On 31 December 1993 the business and assets of Scottish Equitable Life Assurance Society were transferred to Scottish Equitable plc as part of the demutualisation process when they became a public limited company. Scottish Equitable plc is owned by Aegon UK plc.
Scottish Equitable has a 180 history – based in Edinburgh. It is one of the UK’s oldest and most established insurance companies.
Aegon With-profits funds
They have three types of with profits contracts/funds:
• Traditional with profits
• Unitised with profits
• New generation with profits.
They generally offered traditional with profits contracts up to 1984 for pensions business (for example retirement annuities) and 1991 for life business (for example endowment plans). They then had unitised with-profits funds available under contracts taken out after these dates up to 30 September 2002. Since then, they offered their new generation with profits funds until 1 August 2013 when they decided to close the new generation with-profits funds to new investment.
For the latest with profits bonus information please click here.
For information on how Scottish Equitable approach the management of their with-profits, including their current asset allocation mix and customer friendly documents on each product type please click here.
Please remember that any of our summary findings or conclusions are general; an appraisal of the general position for that company. There will be situations where an individual policyholder with a company that is ‘good’’ may want to look at surrendering or transferring their policy (for example to secure a guarantee or because it does not suit their risk position), likewise there will be situations where policyholders with a ‘poor’ company want to stick with what they have (for example because the penalty of exiting will be too great). Nothing can replace getting a report based on your unique circumstances; it is only this unique, personalised report which will provide the information that will instruct you on your circumstances regardless of the company and our general comments.