Axa Wealth is set to pilot a variable annuity with a select group of IFAs and aims to roll it out industrywide in October.
Under its £2.75bn deal to sell off its life business to Resolution, Axa is maintaining its wealth division, which it says brings in 70 per cent of the overall UK business profits.
Axa Wealth says the annuity has been modelled on third-way products sold through its European arms but redeveloped for the UK market.
Money Marketing revealed in 2007 that Axa was developing a product but it is understood that it shelved its plans because of the financial crisis. In February this year, Money Marketing revealed Axa had revived plans to develop a product.
Chief executive Mike Kellard says: “There is definitely a gap in the market that variable annuities fill but part of the problem is that people have tried to jazz them up too much by adding too many funds that they cannot hedge against. We have around nine funds but we can accurately hedge against them.”
Directly Financial director Stuart Bayliss says: “The Axa product gives us an opportun-ity to have a third significant player in the UK joining Lincoln and Metlife. If we can be more flexible about the type of guarantee and keep the products quite simple, I think there is a market for them.”