In the context of with-profits funds, the terms “90/10” and “100/0” refer to the distribution of profits between policyholders and the insurance company:
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90/10 Fund: In this arrangement, 90% of the profits generated by the fund are allocated to policyholders, while the remaining 10% goes to the insurance company. This is a common structure in traditional with-profits funds, where policyholders benefit from a significant share of the profits.
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100/0 Fund: Here, 100% of the profits are allocated to policyholders, with the insurance company not taking a share of the profits. This structure is less common and typically indicates that the insurance company earns its revenue through other means, such as management fees.
These structures impact the returns policyholders receive and the incentives for the insurance company managing the fund.