Standard Life, Europe's largest mutual life insurer, has cut bonuses for with-profit policyholders.
Stock market falls and low interest rates are blamed for cuts
Annual bonus rates on its with-profits life policies were cut from 2.5% to 2%, while bonuses on pension policies were reduced from 3.25% to 2.5%.
It is the sixth time in three years Standard Life has made cuts to bonus rates, despite an 8.7% rise in the value of the with-profits fund in 2004.
The insurer blamed the cuts on poor share returns and low interest rates.
With-profits policies are designed to smooth out the peaks and troughs of stock market volatility.
Profits made in good years are kept in reserve to pay investors an annual bonus even when the stock market performs badly.
Slumping share prices throughout 2001 and 2002 forced most firms to trim bonus rates on their policies.
Standard Life came in for criticism for sticking with stock market investments during 2001 and 2002.
The insurer argued that shares outperformed other investments over the long term and that policyholders would feel the benefit when the stock market recovered.
Recently, Norwich Union and Axa Sun Life both cut their with-profit bonus rates.
John Gill, managing director of the insurer's life and pensions division, said that a strong stock market recovery in the past two years had only "partly compensated for losses during 2001 and 2002".
In addition, low interest rates meant that "long-term investment returns are well below historic levels", Mr Gill added.
However, Mr Gill maintained that with-profits continued to perform well over the long term.
"Our payouts continue to stand up well against other types of long-term investments over similar periods," he said.
Standard Life has an estimated 2.4 million with-profits policyholders. Last year, the company announced that it was looking to float on the stock market in 2006.