Scottish Widows will offer an enhanced annuity as part of its forthcoming mid-market annuity suite and may look to launch equity release and long-term care products dependent on Government reforms.
Last week, the company announced its intention to return to the IFA annuity and protection sectors.
In an interview with Money Marketing, Scottish Widows chief executive Toby Strauss says the annuity proposition will focus on mid-market clients and include an enhanced annuity option. He says fixed-term, investment-backed or variable annuities are further down the list of priorities.
Strauss says: “Our biggest focus is customer segmentation and a fit for purpose simple set of products to suit that need. We are less interested in the more esoteric stuff that plays in the high-net-worth area.”
Given the firm’s annuity move, Strauss says he sees potential in launching an equity-release offering, although he has concerns over risk. He says equity release could play an important part of the Government’s long-term care reform agenda and he would also be interested in launching an LTC insurance product if the Government pushes forward with its planned cost cap.
Strauss says Widows is consulting with IFAs about its protection proposition but it is likely to be similar to the menu-based life and critical-illness cover proposition offered direct.
Better Retirement director Billy Burrows says: “There is a lack of competition in the annuity market so new entrants should be welcomed. People with low-value pension funds need simple products but the question is over the type of annuity options required by the middle market, where I think there is a strong case to look at alternatives to traditional products.”