Demand for protection products is likely to increase as the UK economy comes out of recession. Regulatory and state benefit changes will continue to drive product and distribution innovation. In particular, the ECJ ruling with respect to gender discrimination will affect underwriting and pricing in individual protection. Low annuity rates and the removal of compulsion to annuitise will encourage the more wealthy to look for alternative retirement income methods, and could lead to increased deferral of annuitisation across the market.

In the [BPA] market, reinsurance will increasingly be used to limit the risk and capital required to support both new and existing businesses as the impact of pension liabilities on companies’ balance sheets continues to be exposed. We expect competition consolidation to continue in the protection markets and distribution arrangements to be impacted by the changes the Retail Distribution Review (RDR) will bring to this landscape.