UK-based ICMIF member NFU Mutual has announced it shared a GBP 54m Mutual Investment Bonus with eligible With-Profits customers in 2023.
Mutual Investment Bonus is applied as an uplift to investments, representing a 1.5% increase in investments for 2023, and is in addition to the annual bonus provided to customers that receive one.
As a mutual with no shareholders, NFU Mutual says eligible customers who invest in the With-Profits fund benefit from the success of the fund and its financial strength, reflecting the current and expected economic conditions.
Thanks to the NFU Mutual’s financial strength, over GBP 180m has been added to investments of eligible With-Profits customers through Mutual Investment Bonus over the past five years.
The insurer has also announced further good news for With-Profits customers, as Mutual Investment Bonus is being increased to 1.85% from April 2024.
Saurabh Agrawal, Head of With-Profits at NFU Mutual, said: “We’re delighted to share the benefits of our strong financial position with our eligible With-Profits customers through Mutual Investment Bonus.
“As a mutual without shareholders, we can share our success with our customers, whether they buy general insurance policies with us or invest in our With-Profits funds.
“After sharing GBP 54m of Mutual Investment Bonus in 2023, we are pleased to announce we are also increasing the uplift to 1.85% in April.
“Our customers typically stay with us for a long time, which means the long-term investment horizon of the With-Profits fund is appealing to many of them.
“The approach of smoothing can provide many investors with peace of mind in times of market volatility – and can help minimise the impact of adverse market movements to those withdrawing money.
“The With-Profits funds enable customers to invest in a variety of assets, including equities in companies based in both the UK and overseas, commercial property in the UK, and both corporate and government bonds.”
NFU Mutual offers With-Profits funds to its ISA, pension, and investment bond customers.
Mutual Investment Bonus is for eligible NFU Mutual customers who invest in the With-Profits fund. There are currently over 60,000 eligible policies.
NFU Mutual’s With-Profits fund has delivered strong returns over the past decade. The With-Profits Pension provided returns of 73.8% in the 10 years between the start of 2014 and end of 2023. The With-Profits ISA returned 67.2% over the same decade.
NFU Mutual says it is proud of its history of sharing its success with members, and also offers a separate Mutual Bonus to its General Insurance customers.
With-Profits is a long-term investment for those investing money for five years or more. Returns on investments are smoothed out over time, allowing customers to reduce the impact of the peaks and troughs of volatile stock markets. Mutual Investment Bonus is an additional uplift given on top of this smoothing process.
