Annuities Insurance in the UK, Key Trends and Opportunities to 2017

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Annuities Insurance in the UK, Key Trends and Opportunities to 2017

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Synopsis

• The report provides market analysis, information and insights into the UK annuities insurance business
• Provides a snapshot of market size and market segmentation
• It analyzes drivers and the outlook for the market
• It provides information on distribution channels for annuity products in the UK
• It covers deals, news and regulatory developments
• If offers a detailed analysis of the competitive landscape and types of annuity

Summary

New business premiums in the annuities market rose by 25.9% to GBP13.6 billion in 2012 as customers rushed to buy annuities before the gender-neutral pricing rules were introduced on December 21, 2012. Advisers also aimed to secure new annuities business ahead the Retail Distribution Review (RDR) rules banning providers from paying commission to advisers.
The 2012 surge in annuity sales helped insurers to maintain a steady level of new business, leading to an overall expansion of the annuities market, excluding bulk transfer and deferred annuities, at a compound annual growth rate (CAGR) of 4.1% during the review period (2008?2012).

Annuity rates have been in decline for 20 years, reducing the amount of income people can buy with their pension pots to record lows. Annuities convert an individual's pension savings into an income for the rest of their life. The fall in annuity rates was attributed to the rising life expectancy, meaning that life insurers have had to guard against paying out for longer.
Annuities are also invested in low-risk gilts, or government bonds, and therefore, linked to movements in gilt yields. The Bank of England's policy of quantitative easing (QE) caused interest rates and gilt yields to fall, leading to a collapse in annuity rates.
The continuous pressure of Solvency II also meant that annuity providers had to drive up their capital reserves and charge more for annuities – resulting in lower pension incomes for customers.

Scope

• This report provides a comprehensive analysis of the UK annuities market.
• It provides historical values for the UK annuities market for the report's 2008–2012 review period and forecast figures for the 2013–2017 forecast period.
• It offers estimates of new business premiums for the annuities market.
• It analyses the key types of annuity products.
• It provides an overview of market dynamics and market drivers.
• It discusses various distribution channels for annuity products in the UK.
• It profiles top annuity providers in the UK and outlines the key regulatory changes affecting them.

Reasons To Buy

• Gain an understanding of the UK annuities market size.
• Explore the market dynamics across different annuity categories.
• Learn about the performance of market drivers and distribution channels.
• Understand the competitive landscape and key annuity propositions.
• Find out more about key deals and recent developments in the market.


Key Highlights

• Annuity sales rise ahead of the gender directive and RDR implementation.
• Annuity rates recover in 2013 but reprieve may be short-lived.
• The 2014 budget wipes out billions from the value of annuity providers.
• New pension rules threaten the future of annuity products.
• The FCA warns against non-advised sales of annuities.

Table of Contents
1 Executive Summary
2 Introduction
2.1 What is this Report About?
2.2 Definitions
2.3 Methodology
2.4 Market Size
2.4.1 Purchased life annuities (PLA) new business
2.4.2 Compulsory purchase annuities (CPA) new business
2.5 Conventional Annuities (CPA)
2.5.1 Standard-level annuities new business
2.5.2 CPA impaired life annuities new business
2.5.3 Index-linked annuities (CPA) new business
2.6 Investment-Linked Annuities (CPA)
2.7 Bulk Transfer and Deferred Annuities
2.8 Total Annuities New Business, Including Bulk Annuities – by Type
2.8.1 Non-profit annuities
2.8.2 With-profits annuities
2.8.3 Index-linked annuities

2.9 Income Drawdown
2.9.1 GAD rates
2.10 Annuity Sales Trends
2.10.1 Enhanced annuity sales
2.10.2 Impact of the pot size
2.11 The ABI Code of Conduct on Retirement Choices
2.12 FCA Thematic Review of Annuities
2.13 Market Drivers
2.14 Market Outlook
2.14.1 The budget 2014 sends shockwaves through the pensions industry
2.15 Distribution Channels
2.15.1 Post-RDR annuity market is still dominated by commission
2.15.2 Non-advised annuity sales under the spotlight
3 Competitive Landscape
3.1 Best Performers of 2012
3.1.1 The FCA to probe pension providers over annuities
3.1.2 The budget 2014 throws a 'bombshell' on annuity providers
3.1.3 New pension rules cause life insurers to suspend annuity purchases
3.1.4 Providers reduce income drawdown requirements
3.2 Annuities Insurance – SWOT Analysis
4 Porter's Five Forces Analysis
4.1 Bargaining Power of Suppliers: High
4.2 Bargaining Power of Buyers: Medium to High
4.3 Barriers to Entry: Medium to High
4.4 Intensity of Rivalry: High
4.5 Threat of Substitutes: High

5 Deals
5.1 Just Retirement Completes Major DB De-risking Transaction
5.2 Partnership Signs GBP30 Million Buy-In Deal
5.3 Legal and General and Prudential Agree GBP3.6 Billion Insurance Deal with ICI
5.4 Rothesay Life Buys Metlife Assurance
5.5 Goldman Sachs Sells Majority Stake in Rothesay Life
5.6 Legal and General Buys Closed Annuity Provider Lucida
6 News
6.1 ABI Members Extend their Annuity Cancellation Periods
6.2 LV= Launches One-Year Annuity in Response to the budget
6.3 ABI Pledges Provider Conversation with Every Annuitant
6.4 Just Retirement Cuts Low Pot Threshold after FCA Probe
6.5 Friends Life Launches Open Market Enhanced Annuity
6.6 LV= Boosts Initial Income for Investment-Linked Annuity Savers
6.7 Scottish Widows Enters Enhanced Annuity Market
6.8 Legal and General Exits With-Profits Annuities after Strategic Review
7 Regulation and Compliance
7.1 Regulatory Changes
7.1.1 Risk selection by gender has been outlawed

7.1.2 Retail Distribution Review
7.1.3 Removal of compulsory annuitization at 75
7.1.4 Webb: annuitants should be able to switch
7.1.5 The budget 2014
7.1.6 Changes to the minimum pension age
7.1.7 A new 'guidance guarantee' to be introduced from April 2015
7.1.8 Treasury waives six-month rule on pension lump sum
7.1.9 Pensions tax relief
7.1.10 New flat-rate (single-tier) pension will be introduced from April 2016
7.1.11 Automatic enrolment
7.1.12 Solvency II
8 Economic Backdrop
8.1 Real GDP Growth
8.2 Demographics
8.2.1 Aging population
8.2.2 The old age dependency ratio
8.3 Labor market trends
8.3.1 Employment and unemployment rates, 1971 – 2013
8.3.2 Employment rates by age group, 1992–2013
8.3.3 Average age of withdrawal from the labor market by sex, 1984 – 2012
8.4 Inflation and Average Weekly Earnings
8.5 GDP per capita and household disposable incomes
9 Company Profiles

9.1 Aviva Plc – Company Overview
9.1.1 Aviva Plc – key facts
9.1.2 Aviva Plc – main products
9.1.3 Aviva Plc – main competitors
9.1.4 Aviva Plc – key employees
9.2 Canada Life Ltd
9.2.1 Canada Life Ltd – key facts
9.2.2 Canada Life Ltd – main products
9.2.3 Canada Life Ltd – main competitors
9.2.4 Canada Life Ltd – key employees
9.3 Just Retirement Ltd – Company Overview
9.3.1 Just Retirement Ltd – key facts
9.3.2 Just Retirement Ltd – main products
9.3.3 Just Retirement Ltd – main competitors
9.3.4 Just Retirement Ltd – key employees
9.4 Legal and General Group – Company Overview
9.4.1 Legal and General Group – key facts
9.4.2 Legal and General Group – main products
9.4.3 Legal and General Group – main competitors
9.4.4 Legal and General Group – key employees
9.5 Lloyds Banking Group – Company Overview
9.5.1 Lloyds Banking Group – key facts
9.5.2 Lloyds Banking Group – main products
9.5.3 Lloyds Banking Group – main competitors
9.5.4 Lloyds Banking Group – key employees
9.6 Partnership Assurance Group Plc – Company Overview
9.6.1 Partnership Assurance Group Plc – key facts
9.6.2 Partnership Assurance Group Plc – main products

9.6.3 Partnership Assurance Group Plc – main competitors
9.6.4 Partnership Assurance Group Plc – key employees
9.7 Pension Insurance Corporation Ltd – Company Overview
9.7.1 Pension Insurance Corporation Ltd – key facts
9.7.2 Pension Insurance Corporation Ltd – main products
9.7.3 Pension Insurance Corporation Ltd – main competitors
9.7.4 Pension Insurance Corporation Ltd – key employees
9.8 Prudential Plc – Company Overview
9.8.1 Prudential Plc – key facts
9.8.2 Prudential Plc – main products
9.8.3 Prudential Plc – main competitors
9.8.4 Prudential Plc – key employees
9.9 Rothesay Life Ltd – Company Overview
9.9.1 Rothesay Life Ltd – key facts
9.9.2 Rothesay Life Ltd – main products
9.9.3 Rothesay Life Ltd – main competitors
9.9.4 Rothesay Life Ltd – key employees
9.10 Standard Life Plc – Company Overview
9.10.1 Standard Life Plc – key facts
9.10.2 Standard Life Plc – main products
9.10.3 Standard Life Plc – main competitors
9.10.4 Standard Life Plc – key employees
9.11 UK Annuities New Business Premiums – Review Period
9.12 UK Annuities New Business Premiums – Forecast Period
10 Appendix
10.1 Methodology
10.2 Contact Timetric
10.3 About Timetric
10.4 Timetric's Services
10.5 Disclaimer

List of Tables

Table 1: Insurance Industry Definitions
Table 2: UK Example Drawdown Limits (GBP/%), October 2012 and October 2013
Table 3: UK Percentage of External Annuity Sales (%) and Percentage of Individuals Shopping Around (%), 2003–2013
Table 4: UK Estimated Annual Income Gains by Consumers from Switching Annuity Provider (GBP/%)
Table 5: Savings Required to Produce Different Levels of Annual Income in Retirement at Age 65 (GBP), December 2009 and March 2013
Table 6: UK Completed Annuity Cases in Quarter 1, 2013, Legal and General and Just Retirement
Table 7: Annuities Insurance – SWOT Analysis
Table 8: Aviva Plc, Key Facts
Table 9: Aviva Plc, Main Products
Table 10: Aviva Plc, Main Products
Table 11: Canada Life Ltd, Key Facts
Table 12: Canada Life Ltd, Main Products
Table 13: Canada Life Ltd, Key Employees
Table 14: Just Retirement Ltd, Key Facts
Table 15: Just Retirement Ltd, Main Products
Table 16: Just Retirement Ltd, Key Employees
Table 17: Legal and General Group, Key Facts
Table 18: Legal and General Group, Main Products
Table 19: Legal and General Group, Key Employees
Table 20: Lloyds Banking Group, Key Facts
Table 21: Lloyds Banking Group, Main Products

Table 22: Lloyds Banking Group, Key Employees
Table 23: Partnership Assurance Group Plc, Key Facts
Table 24: Partnership Assurance Group Plc, Main Products
Table 25: Partnership Assurance Group Plc, Key Employees
Table 26: Pension Insurance Corporation Ltd, Key Facts
Table 27: Pension Insurance Corporation Ltd, Main Products
Table 28: Pension Insurance Corporation Ltd, Key Employees
Table 29: Prudential Plc, Key Facts
Table 30: Prudential Plc, Main Products
Table 31: Prudential Plc, Key Employees
Table 32: Rothesay Life Ltd, Key Facts
Table 33: Rothesay Life Ltd, Key Facts
Table 34: Rothesay Life Ltd, Key Employees
Table 35: Standard Life Plc, Key Facts
Table 36: Standard Life Plc, Key Facts
Table 37: Standard Life Plc, Key Employees
Table 38: UK Annuities Insurance – New Business Premiums (GBP Million), 2008–2012
Table 39: UK Annuities Insurance – New Business Premiums (GBP Million), 2013–2017

List of Figures

Figure 1: UK Annuities Insurance (Excluding Bulk Transfer and Deferred Annuities) – Total New Business Premiums (GBP Million), 2008–2012
Figure 2: UK Purchased Life Annuities (PLA) – New Business Premiums (GBP Million), 2008–2012
Figure 3: UK Compulsory Purchase Annuities (CPA), including CPA Impaired Life Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 4: UK Conventional Annuities (CPA) – New Business Premiums (GBP Million), 2008–2012
Figure 5: UK Standard Level Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 6: UK CPA Impaired Life Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 7: UK Index-Linked Annuities (CPA) – New Business Premiums (GBP Million), 2008–2012
Figure 8: UK With–Profits Annuities (CPA) – New Business Premiums (GBP Million), 2008–2012
Figure 9: UK Bulk Transfer Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 10: UK Deferred Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 11: UK Non-Profit Annuities – New Business Premiums (GBP Million), 2008–2012

Figure 12: UK With-Profits Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 13: UK Index-Linked Annuities – New Business Premiums (GBP Million), 2008–2012
Figure 14: UK Income Drawdown – New Business Premiums (GBP Million), 2008–2012
Figure 15: UK Government Actuary's Department (GAD) Interest Rates, 1996–2014
Figure 16: UK Number of New Pension Annuity Sales (Thousands), 2009–2013
Figure 17: UK Enhanced Annuities Sold as a Percentage of All Annuities (%), 2003–2013
Figure 18: UK Nominal Pension Annuity Purchase Value (GBP), 2003–2013
Figure 19: UK Percentage of Annuities Purchased for Less than GBP10,000 (%), 2003–2013
Figure 20: UK Annuity Rates, Gilt Yields and FTSE100, Since 1990
Figure 21: UK New Business Premiums for UK Annuities Insurance, Excluding Bulk Transfer and Deferred Annuities (GBP Million), 2013–2017
Figure 22: UK Annuity Sales Distribution (%), 2012 and 2013
Figure 23: UK Top 10 Annuity Providers Based on Total New Business Premium, Including Bulk Transfer and Deferred Annuities (%), 2012
Figure 24: The UK's Insurance Regulatory Framework
Figure 25: UK Previous Tax System for Accessing Defined Contribution Pensions in Retirement
Figure 26: UK Future Tax System for Accessing Defined Contribution Pensions in Retirement, 2014
Figure 27: UK Real GDP (Million) and Quarter-on-Quarter Growth (%), 2007–2013
Figure 28: UK Growing and Aging Population (Years), 1995–2012
Figure 29: UK Population Aged Over 65 (%), 1995–2017
Figure 30: UK Overall Life Expectancy (Years), 1995–2017
Figure 31: UK Historical and Projected Cohort Life Expectancy at 65 (Years), 1981–2051
Figure 32: UK Old Age Dependency Ratio (Ratio per 1,000 People of Working Age), 1971–2051
Figure 33: UK Employment and Unemployment Rates (%), 1971–2013
Figure 34: UK Employment Rates by Age Group (%), 1992–2013
Figure 35: UK Average Age of Withdrawal from the Labor Market by Sex (Years), 1984–2012
Figure 36: UK Inflation and Average Weekly Earnings Growth (%), 2000–2013
Figure 37: UK Improving Living Standards in the UK (GBP), 1997–2011

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http://www.reportlinker.com/p02114708/Annuities-Insurance-in-the-UK-Key-Trends-and-Opportunities-to-2017.html

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