With-Profits - glossary

We have included a short glossary to define the terms associated with With-Profits to help you understand how your investment works.

Annual bonus

Amounts, which when added to policies, constitute guarantees at specific points in time as per the Policy Conditions. Bonus rates are normally reviewed annually.

Expected growth rate (EGR)

The EGR for each fund is our estimate of the long-term rate of return for each fund’s investment.

Final bonus

A non-guaranteed amount that may be added to guaranteed benefits (including annual bonus additions) when a claim arises.

Market value reduction (MVR)

A reduction in the value of units under a unitised with profits policy that may apply when a claim arises at a point where no guarantee exists.


This is a feature of a pooled With-Profits investment whereby, in the normal course of events, the peaks and troughs associated with direct investment are reduced over the short term to provide a more stable investment return.

Smoothing reductions and increases

This is an adjustment that only applies under the New Generation With-Profits funds. At the point of claim, we may reduce or increase the claim value in order to ensure equity amongst New Generation With-Profits policyholders and to maintain fund stability.

Smoothed asset share

Asset share adjusted for smoothing of investment returns, which are then used as a guide to setting bonus rates.

With-Profits subfund (WPSF)

That part of the long-term insurance fund (of Scottish Equitable plc) into which all with profits business is ultimately written.