Norwich Union considering variable annuity launch
It now looks as though Norwich Union, already a major player in the pension annuity market place, is ready to follow its competitors into the variable annuity market next year. Head of investment development Andrew Lee says the life office is “ratcheting up” its interest in third-way products and has increased the number of staff studying the sector. This could well lead to them offering a new product in 2009.
He says: “We are conscious that the products meet a consumer need to have more certainty and piece of mind but we are also conscious of the price issue. UK consumers are more price-conscious than in the US. Current economic conditions are likely to increase consumer appetite for the products. Several insurance companies have been caught out by their own assumptions so they will be very careful that their capital preservation ensures that these products do not come back to bite them. This is something that plays to our core strengths.”
Interestingly, both Standard Life and Prudential recently announced that there variable annuity offerings are being delayed. Aegon has recently launched a guaranteed offering and Axa is set to launch next year.
For these new variable annuity style products to capture the consumers imagination it would be good for a major player such as Norwich Union to come into the sector as it could mean that this market is finally starting to mature.
Certainly products to date, mainly from US providers, have not yet caught on, and are still seen as complicated and expensive.
