Protection providers have warned that new regulation such as Solvency II and gender-neutral pricing will significantly raise the cost of protection policies from 2013.
Solvency II and gender-neutral pricing are to come into effect on January 1, 2013 and December 21, 2012 respectively. Life companies also have to consider I minus E tax changes.
At the Sesame symposium, Aviva UK chief executive David Barral said: “If advisers sell protection in 2013 they will be doing so at a higher price, so if they have customers who are thinking about buying protection they would be better off buying it in 2012.” Friends Life chief executive Andy Briggs said: “A perfect storm is emerging. Gender-neutral pricing and changes to life company taxation will lead to prices going up but only when they come into force. Pricing ought to stay sensible next year.”