Recent research from State Street found that almost half (47%) of insurance executives and 56% of investment advisers said the changes announced during the last Budget in the UK, would lead to more innovation in the industry. Conversely, 14% and 4% of respondents said it would lead to less innovation.
Product development was also predicted to increase, with 70% of investment advisers and 50% of insurance executives expecting to see greater development and marketing around retirement investment and income products with capital and income guarantees.
There were some concerns though that the rush to meet the challenges presented by the Budget changes could result in “inappropriate” products being taken to market.
David Howie, head of insurance solutions in the UK for State Street said: “The UK retirement planning market is going through a radical change, which represents a very exciting opportunity for insurers and other product providers.
“Our research suggests there is going to be a huge amount of innovation and creativity when it comes to developing new products and services, but the industry clearly feels there will also be more competition.
Just over half of the insurance executives and advisers interviewed expect new companies to enter the UK market, so providers are going to have to move quickly in terms of amending their proposition and developing new products.
“However, the industry needs to guard against inappropriate products being rushed on to the market, with 22% of insurance executives and 15% of investment advisers being ‘very concerned’ about this happening.”