...Negative Outlook Reflects New Pension Legislation, Regulatory Scrutiny Fitch Ratings' sector outlook for UK life insurers is negative, reflecting threats to profitability from a number of recently announced government initiatives on pensions and increased regulatory scrutiny into how insurers treat their customers. Fitch believes there is a risk that further changes to legislation and regulation may be disruptive for insurers and negative for their credit profiles. As announced in the Budget, customers will no longer have to use their pension pots to buy an annuity. The GBP12bn-a-year annuity market may shrink dramatically, as many savers will choose to access their pensions as cash or via drawdown products instead. The government also announced a 0.75% cap on charges for funds that are default selections in pensions auto-enrolment schemes. Although charges on most such funds are lower than this, the move may add to pressure on charges generally. The FCA investigation into whether insurers...
