What is it?
Essentially, the With-Profits Fund is where all our members’ money is invested on their behalf.
The fund is invested in a mixture of assets spread across several investment funds. These assets are equities, commercial property, bonds and cash. You can see the year-end ‘investment mix’ in the pie-chart.
ALL profits are eventually distributed back to our With-Profits members in the form of annual bonuses and normally a final bonus.
How it works
When Metfriendly’s investments perform well and produce a profit we aim to distribute this to our members by adding bonuses. Sometimes however, adverse market conditions (or a poor long-term outlook) may mean it’s necessary to lower our bonus rates.
We keep about half of our total funds in bond and cash funds to provide the necessary security for the benefits that we guarantee to pay – the Sum Assured and all Annual Bonuses so far added to members’ with-profits contracts and to back our policies which are not with-profits (guaranteed savings and protection plans).
The fund has grown significantly over the years and now stands at over £200 million. We are proud of our past performance – that is, the returns we have achieved for our members.
Considerable detail as to how we manage the With-Profits Fund and members’ benefits is given in the full Principles and Practices of Financial Management.
A more ‘consumer friendly’ summary aimed at explaining the salient points can be found in How We Manage The With-Profits Fund.