Merchant Investors is considering bringing out a third-way annuity product to compete with existing providers.
The Hartford, MetLife and Lincoln Financial have all launched third-way annuities but some industry commentators have criticised them for being expensive and not transparent on charges.
Merchant Investors head of sales and marketing Richard Ellis says he can see an opportunity to launch a different type of third-way product that would be chea-per and more transparent.
Ellis says: “We are looking at third-way annuities but we want to sit back and see how the market does. This first wave of products has tried to be too close to the traditional annuity product rather than nearer to an income drawdown product. It might be better to approach it from the income drawdown side instead.”
The specialist insurance company recently launched its OneSipp product which it says helped sales in January to grow by 300 per cent compared with the same period in 2007.