Regulatory change, in particular the EU’s [Solvency II] Directive, continues to create uncertainty for Europe’s insurance markets. We remain concerned that new capital requirements could negatively impact the annuities market in the UK and therefore the income of future UK pensioners.

The continuing lack of clarity over new capital requirements is creating unwelcome uncertainty at a time when there is a major role for the sector to play in rebalancing the economy and in supporting business investment.

We also anticipate that the FSA’s RDR will impact the landscape of the marketplace. While consumers should benefit, one unintended consequence could be a reduction of access to financial advice for some groups of consumers.

We believe that RDR will accelerate change in financial services in the UK and expect more customers to purchase products without advice or through workplace schemes such as Company ISAs.

More information on our response to the RDR can be found in the Savings: Focus on risk management section.