Fresh products and services will be developed to take advantage of the new flexible retirement market in the UK, financial services firm State Street Corporation has claimed.
The US firm polled 57 insurance executives and found that almost half (47%) expect the recent UK regulatory changes impacting pensions and annuities to result in an injection of innovation into the market between now and 2019.
Less than one fifth (14%) of the respondents said the regulatory changes would lead to less creativity.
David Howie, State Street's head of insurance solutions in the UK, 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.'
The respondents said they expected product development and marketing to be focused on income drawdown, followed by products with capital and income guarantees. The third most popular option was 'U' or 'J' shaped annuities, which vary the income supplied in accordance with retirement needs.
But 20% said existing underlying fund structures and asset allocation blending capabilities could hold back their ability to develop these products.
The survey also polled 70 investment advisers and, combined with the insurance executives, just over half said they expect new companies to enter the UK market.
Howie said that providers needed to move quickly to amends their plans and develop new products. However, the industry needed to guard against inappropriate products being rushed on to the market.
One fifth (22%) of insurance executives and 15% of investment advisors polled said they were 'very concerned' about this happening.
