August 1 2014 Latest news:
Shaun Lowthorpe, Business editor
Thursday, February 13, 2014
Insurance giant Aviva has vowed to put right an underpayments blunder which could see nearly 400,000 customers compensated following a series of mistakes.
The insurer revealed that it has written to four million of its customers since it first uncovered the problems – thought to be linked to the merger of the then Norwich Union and CGU businesses – back in 2007.
Since then it has set aside a compensation fund and has already paid out £163m to around 390,000 customers, around 2.5pc of its UK customer base, and half the total numbers thought to be affected by the errors. It is expecting to contact a further 390,000 customers, likely to take the total paid out to more than £300m.
The errors are related to its Life business, based predominantly in York, and not its Norwich-based general insurance division, and cover a range of products from personal pension plans, workplace pensions, life insurance cover and savings. They range from incorrect tax rates being used on pension plans to problems with how savings had been invested.
Customers who think they could be caught up in the blunders were told to sit tight as the firm said it would get in touch.
And Aviva insisted it had strengthened its processes and controls to prevent any reoccurrence.
A spokesman said: “At Aviva we believe in doing the right thing for our customers. We regret that these historical mistakes were made. If any error has been made we will put it right.
“We are working through any outstanding cases systematically and are making good progress. Any customers who may be affected can be confident we will contact them. We found the issues, we are fixing them and we are putting them right.”