Impact of gender neutral ‘not that great’ for annuitants
Providers likely to face more challenges than policyholders once gender neutral pricing comes into force
Gender neutral pricing on annuity rates may not have as much of an impact on annuitants as some have predicted, two pensions experts have said.
Speaking at the Financial Times Intermediary Forum on pensions today, panellists said there would be a far greater impact on providers than consumers.
“For annuities, I don’t think it is that big an issue for consumers,” said Alan Bradbury, head of annuities at the Phoenix Group. He said the difference between male and female rates is about 6 per cent and, while there would be “winners and losers”, providers would face greater challenges than annuitants.
“Firms will start to look for alternative rating factors over the long term,” he added. “There is a gearing effect on providers.”
Peter Ellis, director of retirement income at Just Retirement, said that in many joint life cases, the impact of gender pricing is likely to balance out to produce a similar rate. The dynamic is often an older male with an enhanced rate, he said, along with a younger female in better health. “The impact is probably about equal,” he said. “You will get most no difference in equal and opposite joint life cases.”
Another panellist Billy Burrows, director of Better Retirement Group, pointed out that it is difficult to know exactly what will happen as providers are reticent to reveal their full gender pricing plans ahead of the December deadline. “Insurance companies are playing their cards close to their chest,” he said. “My best guess is we will see a lot more segmentation of pricing. Once we get through the first three months we might return to normality.”