LV= could take third way
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Last month, Money Marketing revealed the firm was developing a fixed-term annuity similar to that of Living Time. Aviva is also considering a temporary product. LV= has since confirmed it is also looking closely at the third-way market and may pilot a product to compete with the likes of Metlife, Aegon and Lincoln.
Chief executive Mike Rogers says: "We are aware there will be more opportunities for things like variable annuities as the market develops and people search for more income upsides from their retirement assets.
"It seems self-evident to me if you look at the challenges that people have at retirement and the inadequacies of a trad- itional annuity that people are going to be cautious about locking in to very safe but very low-yielding annuities for what could be 30 years.
"We see the ability to offer people flexibility and income upside with guarantees as an attractive market area but we appreciate that, to date, people have struggled to make it work.
"We have not concluded yet but perhaps you should expect us to pilot a few things to see how the market reacts to them. People are increasingly not going to be satisfied with a bog-standard annuity. Watch this space."
In May, The Hartford suspended sales of its variable annuity in the UK. This was followed by price increases from Metlife and Aegon and in June Lincoln was bought by Sun Life of Canada.
Annuity Exchange director Stuart Bayliss says: "As LV= already has a with-profits annuity, I think there would be advantages in operating a variable product under unsecured pension rules to offer different types of guarantees, other than just the income, which is all we have seen so far."
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