The figures reflect The Hartford’s withdrawal from the marketplace in May as well as tough economic conditions.
But Watson Wyatt believes third way products remain appropriate for a decent segment of consumers who are approaching or at retirement.
It says the growth anticipated in the at-retirement market presents a “sizeable commercial opportunity” for existing providers and potential new entrants.
But senior consultant Andy Sanders says reinvigoration of the market may be required.
He says: “These figures are indicative of challenging economic times for businesses and individuals and also reflect Hartford’s withdrawal from the marketplace.
“Reinvigoration of this market may be needed to remind consumers and advisers of the virtues of third way propositions like variable annuities as alternatives to conventional annuities and income drawdown.”