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Axa revives plans for a variable annuity

Axa is back on track with plans to launch a variable annuity.

Evans: ‘Compelling offers’
Evans: ‘Compelling offers’

Money Marketing revealed that Axa was developing a product in late 2007 but it is understood to have been put on the backburner because of the financial crisis.

But life chief executive Paul Evans says work has resumed on the product, although he will not give a projected launch date.

He says: “We are looking at launching a variable product. The market emerged in 2007/08 and obviously the guarantees were not well priced and the providers have all gone home or fundamentally changed their products.

“We need to make sure lessons have been learned from that and that compelling offers at an acceptable price for the consumer are introduced and we are working on that.”

Evans has also slammed initial commission in the group pension market.

Axa’s corporate pension sales were down by 15 per cent to £287m last year from £337m in 2008.

Evans says: “We have withdrawn from that initial commission market. We do not really want to participate in what could become a buy-now-while-stocks-last pre-RDR commission opportunity for group pensions. We do not think it is profitable.

“I really hope it is not a buy-now-while-stocks-last situation because that would be extremely damaging for the industry. It is time for the industry to be very grown up. We cannot afford to chase these portfolios up to the point that RDR comes in. We have to ensure what we are doing is right for customers and that we do not destroy value in the industry by constantly moving business between providers.”

Axa’s UK new business fell by 20 per cent last year to £802m from £1.1bn.

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