A life insurance company has issued conventional with-profits endowment and whole life assurance policies for many years, and uses the additions to benefits method of surplus distribution. The company has recently had difficulties with this product, following several years of poor investment performance in the equity and property markets. The insurer therefore proposes to close its existing with-profits product to new business and to sell accumulating with-profits products in the future, which it has not sold before. (0) Explain the difficulties the insurance company might have been having with the current type of with-profits business. [5] (ii) Discuss whether the proposed course of action will help the insurer resolve these problems. [8] [Total 13]