Regular bonus levels have been increased by between 0.25% and 0.75% from last year's levels on a range of AXA Sun Life's policies. Market Value Reductions (MVRs) have been reduced by between 5% and 7% on most policies. Most terminal bonuses remain unchanged or have been increased, with just a small proportion being reduced.
2005 was a good year for our with profits customers. The ASL with profits fund produced an investment return of 16%. Many regular bonus rates have increased for the first time for several years. MVRs have been reduced - by 5% or more. Long term returns on maturing policies remain good - over 7% pa on 20/25 year policies.
AXA With Profits Bonus Declaration 2006
1. Regular bonus rates
Regular bonus rates on AXA's principal policy types are as follows:
AXA Sun Life (ASL)
| Product type | From 28/02/2005 | From 27/02/2006 |
|---|---|---|
| Mortgage Endowment1 | 3.00% | 3.00% |
| Bond | 1.50% | 1.75% |
| Personal Pension | 1.50% | 1.75% |
| New World (stakeholder) Pension | 2.75% | 3.50% |
1 The rate shown for Mortgage Endowments includes a guaranteed interest rate of 3%
| Product type | 1/1/2004 - 31/12/2004 | 1/1/2005 - 31/12/20052 | Interim from 1/1/2006 |
|---|---|---|---|
| Conventional Life2 | 1.0% | 1.0% | 1.0% |
| Conventional Pension2 | 1.0% | 0.0% | 0.0% |
2 The regular bonus rate declared today is retrospective and applies for the past year from 1/1/2005 to 31/12/2005.
Sun Life Assurance Society (SLAS)
| Product type | 1/1/2004 - 31/12/2004 | 1/1/2005 - 31/12/20053 | Interim from 1/1/2006 |
|---|---|---|---|
| Conventional Life | 1.25% | 1.25% | 1.25% |
| Mortgage Endowment | 1.75% | 1.75% | 2.25% |
| Bond | 1.75% | 1.75% | 2.25% |
| Personal Pension | 2.25% | 2.25% | 3.00% |
3 The regular bonus rates declared today are retrospective and apply for the past year from 1/1/2005 to 31/12/2005.
2. Payout Values
The following maturity payout examples show the position of policies in 2006 compared with their position in 2005. The 1 March 2005 figures allow for any reduction in value due to surrender/transfer.
Note that for regular premium contracts the percentage change over the year excludes the extra premiums paid over the year i.e. the extra premiums are not being included as growth.
ASL Endowment
Male aged 30, monthly premium of £50
| Type of Contract | Surrender Value 1 March 2005 | Maturity Value 1 March 2006 | Percentage change over year | Average annual growth |
|---|---|---|---|---|
| Conventional mortgage endowment | £34,844 (24-year term) | £39,255 (25-year term) | 10.8% | 7.0% |
| Unitised mortgage endowment | £5,363 (9-year term) | £7,085 (10-year term) | 18.8% | 3.3% |
ASL Personal Pension
Male aged 45, paying a monthly premium of £200
| Type of Contract | Transfer Value 1 March 2005 | Maturity Value 1 March 2006 | Percentage change over year | Average annual growth |
|---|---|---|---|---|
| Unitised | £89,151 (19-year term) | £105,728 (20-year term) | 15.5% | 7.4% |
ASL Bond
Male aged 30, paying a single premium of £10,000
| Type of Contract | Surrender Value 1 March 2005 | Surrender Value 1 March 2006 | Percentage change over year | Average annual growth |
|---|---|---|---|---|
| Unitised | £8,851 (4-year term) | £9,970 (5-year term) | 12.6% | 0.0% |
| Unitised | £13,154 (9-year term) | £14,594 (10-year term) | 10.9% | 3.9% |
SLAS Endowment
Male aged 30, monthly premium of £50
| Type of Contract | Surrender Value 1 March 2005 | Maturity Value 1 March 2006 | Percentage change over year | Average annual growth |
|---|---|---|---|---|
| Conventional mortgage endowment | £34,429 (24-year term) | £41,645 (25-year term) | 18.9% | 7.4% |
| Unitised mortgage endowment | £5,537 (9-year term) | £6,583 (10-year term) | 7.3% | 1.8% |
SLAS Personal Pension
Male aged 45, paying a monthly premium of £200
| Type of Contract | Transfer Value 1 March 2005 | Maturity Value 1 March 2006 | Percentage change over year | Average annual growth |
|---|---|---|---|---|
| Conventional | £109,888 (19-year term) | £129,091 (20-year term) | 15.0% | 9.0% |
SLAS Bond
Male aged 30, paying a single premium of £10,000
| Type of Contract | Surrender Value 1 March 2005 | Surrender Value 1 March 2006 | Percentage change over year | Average annual growth |
|---|---|---|---|---|
| Unitised | £14,992 (9-year term) | £16,491 (10-year term) | 10.0% | 5.1% |
3. Market Value Reductions
Market Value Reductions (MVRs) have been reduced on most policies by between 5% and 7%. No MVRs have been increased. This has been made possible by the improved asset performance of the with profits funds in the last year. MVRs are applied in certain circumstances, such as when a customer chooses to exit the fund outside their maturity date. MVRs are applied to ensure that all customers receive a fair share of the fund's asset performance, whether they are staying in the fund or exiting it. MVRs do not apply at life maturities, on death, or on any conventional with profits policies.
The average MVR amongst bonds in the ASL with profits fund has been reduced from 10% in 2005 to 5% in 2006. In the SLAS with profits fund, the average bond MVR has been reduced from 4% to 1%.
4. Asset Mix
The overall asset mix of AXA's with profits funds has been as follows:
ASL Fund
| Class | % at end 2004 | % at end 2005 |
|---|---|---|
| Equities | 41% | 44% |
| Property | 17% | 16% |
| Fixed Interest | 35% | 38% |
| Cash | 7% | 2% |
SLAS Fund
| Class | % at end 2004 | % at end 2005 |
|---|---|---|
| Equities | 39% | 42% |
| Property | 9% | 10% |
| Fixed Interest | 43% | 45% |
| Cash | 9% | 3% |
All asset mix figures are approximate, and vary by policy type.
5. Investment Return and With Profits Fund Size
The return for AXA's ASL with profits fund over 2005 was 16.0%, compared to 11.8% in 2004. The return on the SLAS with profits fund was 13.9% in 2005, whereas in 2004 it was 11.1%.
The size of the ASL with profits fund is £10.1bn. The size of the SLAS with profits fund is £6.4bn.