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With Profits

On this page you can find information on the current investment position of the OneFamily (EM) With Profits Fund.

To understand how this may affect the payout on your policy it should be read in conjunction with Consumer Friendly Principles and Practices of Financial Management (CFPPFM).

If, when you've read this guide, you would still like further information, our Principles & Practices of Financial Management (PPFM) for the OneFamily (EM) With Profits Fund gives more detailed and technical information about how we manage the With Profits Fund.

OneFamily (EM) With Profits - performance

The information below relates to the OneFamily (EM) With Profits Fund, and does not apply to the OneFamily (ELL) With Profits Fund.

Our 2014 OneFamily (EM) With Profits Fund performance

Overall the OneFamily (EM) With Profits Fund returned 5.4% in the year.

The fund is managed on a cohorts basis. The current practice is to group policies together according to product type and the time period until the next guarantee date. An asset mix is then determined for each group of policies (or cohort) based on the amount of guarantees in relation to asset shares, and the time period until the next guarantee date.

The underlying investment performance in 2014 was 5.7% for most cohorts.

It must be remembered that past performance is not a reliable indicator of future results.

See "OneFamily (EM) With Profits - asset mix" in the tab below for more information.

Investment returns and policy payouts

The groups of policies and the underlying asset mix are reviewed on a regular basis.

The investment return earned by the underlying assets of each group of policies is used in the asset share calculations. For each with profits policy, the asset share is its overall fair share of the value of the assets in the applicable underlying asset mix.

Policies with high levels of guaranteed benefits in relation to their asset share and which are close to the guarantee date are more likely to be invested in fixed interest investments.

This is intended to help protect policies near the end of their term from any major downturns that might occur when invested in higher risk/higher growth assets.

Policies where the guaranteed benefits are not such a constraint and/or have a longer period until the guarantee date are more likely to be in higher risk/higher growth based investments which have greater growth potential over the long term.

See the current groupings and "OneFamily (EM) With Profits - asset mix" in the tab below for more information.

Please note: past performance is not a reliable indicator of future results. Your investment may go down as well as up and you may not get back the full amount of your original investment.

What this means to individual policyholders

It is important to remember that the fund performance in any one year isn’t directly reflected in a customer’s policy, due to the smoothing process that is a feature of a with profits investment.

Investment returns achieved by the fund will vary over time and there will be periods when investments may do very well, but other periods when they may perform badly. The smoothing process holds back some of the fund growth from good years to help cushion against years where performance of investment markets may not be so good. In effect, it helps to smooth out some of the short term variations in performance.

To understand how this may affect the payout on policies invested into the with profits fund, please see our Consumer Friendly Principles and Practices of Financial Management (CFPPFM), which aims to explain in simple terms how we manage the fund in relation to different sorts of with profits policies. This should be read in conjunction with the fund’s current investment mix.

For holders of the Protected Investment Bond and Protected Loyalty Bond which invest into the OneFamily (EM) With Profits Fund, please see the Consumer Friendly Principles and Practices of Financial Management (CFPPFM) which contains important information about how the Protected Investment Bond and Protected Loyalty Bond work.

If you have any questions about your policy please contact our customer contact centre on 0800 169 4321†

OneFamily (EM) With Profits - asset mix

This summarises the current investment position of the With Profits Fund. To understand how this may affect the payout on your policy it should be read in conjunction with Consumer Friendly Principles and Practices of Financial Management (CFPPFM). If, when you’ve read this guide, you would still like further information; our Principles & Practices of Financial Management (PPFM) for the OneFamily (EM) With Profits Fund gives more detailed and technical information about how we manage the With Profits Fund.

Overall With Profit asset mix

We monitor the asset mix for the Fund, and for different policy groups, on a regular basis, and will change the asset mix, depending on:

  • The total amount of policy guarantees, and when these guarantees are likely to arise
  • Our view of investment market conditions
  • The overall financial strength of the Fund (or in other words, the size of the additional assets over and above what is required to meet policyholder benefits and cover other business risks).

The overall asset mix of the OneFamily (EM) With Profit Fund as at 30/09/2016 was:

 Asset  %
Government Backed Fixed Interest Securities (Gilts) 24.2%
Insight Broad Opportunities Fund (see footnote 2) 58.0%
Insight Global Absolute Return Fund (see footnote 3) 2.3%
Insight Liquidity Fund and Cash (see footnote 1) 11.8%
Property 2.7%
Other Assets 1.0%

Investment returns and policy payouts

The investment return used in asset share calculations is based on the assets backing the with profits policies. As explained in Consumer Friendly Principles and Practices of Financial Management (CFPPFM), we group together with profits policies with similar characteristics and use asset shares as the basis for determining policy payouts. The current practice is to group policies together according to product type and the time period until the next guarantee date.

An asset mix is then determined for each group of policies, based on the amount of guarantees in relation to asset shares, and the time period until the next guarantee date. The investment return earned by the assets that have been notionally allocated to each group of policies is then used in the asset share calculations.

For each With Profits policy the asset share is its overall fair share of the value of the assets in the applicable underlying asset mix. The groups of policies and the underlying asset mix are reviewed on a regular basis. You can see the current groupings and asset mix for your plan using the table below;

If your policy was originally taken out with the United Kingdom Civil Service Benefit Society (UKCSBS) and is in:

Policy Group Asset mix as at 01/01/12
With Profits Endowments Maturing before 1st January 2015 (Sections B, D, E, H, J, LC) 100% Short Duration Gilts
With Profits Endowments Maturing on or after 1st January 2015 (Sections B, D, E, H, J, LC) 100% Insight Broad Opportunities Fund (see footnote 2)
With Profits Endowments (Section G) 100% Insight Broad Opportunities Fund (see footnote 2)
With Profits Whole of Life Products (Sections AC and CB2) 100% Insight Broad Opportunities Fund (see footnote 2)
All Unitised With Profits Bonds (Section S) 100% Insight Broad Opportunities Fund (see footnote 2)

If your policy was taken out with Engage Mutual Assurance and is in;

Policy Group Asset mix as at 11/01/13
Easy Save, Junior Easy Save and Easy Bond 100% Insight Broad Opportunities Fund (see footnote 2)
Protected Investment Bond and Protected Loyalty Bond 100% Insight Global Absolute Return Fund (see footnote 3)

 

Footnotes

(1) Insight Liquidity Fund
Managed by Insight Investment Managers, the aim of the fund is to provide stability of capital and income through investment in short term fixed income and variable rate securities.

(2) Insight Broad Opportunities Fund
Managed by Insight Investment Managers, this fund aims to generate long term capital growth through a dynamic asset allocation strategy across several different asset classes (mainly equities, fixed income securities, commodities and property).

(3) Insight Global Absolute Return Fund
Managed by Insight Investment Managers, the aim of the fund is to deliver positive returns on an annual basis with the prospect of long-term capital growth by following a broad 'multi-asset' portfolio approach.