Pension freedoms have opened up opportunities yet made life more complicated for consumers, advisers and insurers

The reform has thrust insurers into a complex landscape with multiple default options, longer investment horizons, greater product diversity and most challenging of all, customers phoning up for help at a time when the retail distribution review (RDR) has exacerbated what was already a significant advice gap.

When considering the impact of the freedoms on insurers’ business model, it would be easy to focus on the commercial implications of no longer being able to sell expensive annuities to inert customers, the potential for new decumulation products or buying IFAs to secure distribution channels, but that would miss the wider context of an industry that had already found itself at a historic crossroads.

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Life insurers thrived for generations selling the 25-year savings product that only worked if you held it for 25 years.

But now the sector is being asked to deliver flexible solutions that can constantly evolve to meet the changing needs of customers, public policy and the latest technological breakthroughs. To do this successfully, a whole host of change is needed but at the heart of this lies the need for a much closer alignment between advisers and manufacturers.

The life insurance industry was one of the great innovations of the British Empire that for 200 years has played a key role insuring the nation and helping it save.

The sector has helped consumers build strong financial futures and created capital for businesses to invest aided by tax incentives, strong balance sheets and exceptional levels of trust.

The last two decades have brought a tsunami of change and the market has shifted from competing on commission and complexity towards offering simpler products, platforms and services.

The policy framework has seen 15 material changes in the last 17 years headlined by RDR, auto-enrolment and pension freedoms with more to come, especially if Lisa proves to be the Trojan Horse for a more fundamental shift to taxed, exempt, exempt (TEE) that many predict.

Consumer expectations have been re-set as we become increasingly familiar with digital services like Amazon and iTunes. In all aspects of life consumers are increasingly omni-channel, wanting to deal with providers on their own terms, delegating, but not abdicating decisions and living more dynamic lives that require flexible solutions and demanding simplicity.

The insurance sector has notoriously arcane back office technologies which has limited its tech innovation to date, but that will change in the next decade as firms manage their legacy IT issues, personal ownership of data leads to customer aggregation starting with the pensions dashboard and cutting edge innovations such as AI, robo-advice and analytics are fully established.

We are rapidly approaching the day of reckoning as it becomes increasingly apparent just how different the actuarial skills and pensions expertise that made insurers successful in the past are to the digital skills and asset management expertise they need to be successful in the future.