Level Plan Bonus: Investment Strategy

Storebrand Asset Management manages Nordben’s 7 Level Plan policyholders' funds.

The Level Plan policyholders' funds currently invest in long-term fixed interest bonds, equity funds and cash. Nordben aims to invest an appropriate percentage of its assets in fixed interest bonds so that it can broadly secure the guarantees underlying the Plan.

Having prioritised covering these guarantees, the remaining funds are then invested to seek the best return for policyholders within an acceptable level of risk.  Nordben currently invests the funds in a mixture of equity and cash.

The bonus is determined having regard to the long term expected increase in the surplus of the fund.  The surplus is influenced by the performance of the assets, the yields on the bonds matched to meet the guarantees to the policyholders and changes in life expectancy.  There is an added aim to smooth out the bonuses from year to year in order to endeavour to generate a steady return.  However, the declared bonus rates may not keep up with inflation.  The bonus target may change over time.