Aviva abandons plans for windfalls
by Kay Murchie
The world’s fifth largest insurance group, Aviva, threatens its reputation as it warns that it is to abandon the distribution of the £5 billion surplus from its Norwich Union with-profits funds.
The insurer said it may mothball the scheme for several years, abandon it altogether or bypass policyholder advocate Clare Spottiswoode and present offers direct to policyholders.
Aviva said it still hopes to strike a deal where the cash is split between policyholders and shareholders in a way both parties agree is fair.
However, sources close to the company said such an outcome is becoming less likely as it is believed that both parties cannot agree over how much of the money the insurer can ring fence for its own purposes.
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