Annuity prices soared in 2009 as the market considered itself to be at great risk of profit loss. Financial charts show a narrowing of prices in 2010 as they reached historical levels. It is likely that prices will remain stable in 2011 and into the near future.
Insurance company Legal & General is known for its stability as its prices remain constant over time. The insurer is more affordable than most companies as Executive Director John Pollock said;
“Typically annuities were priced somewhere between best estimate and this prudent reserve.”
The price rise stemed from deals that were done with little thought of what they could afford. Companies such as Legal & General remained prominent as it grew exponentially in 2009. Business was conducted with growth in mind as deals were done to expand the company’s customer base.
Mr Pollock claimed that the European Court of Justice’s (ECJ) verdict was incorrect as gender was a valid way to determine rates. He considered that the court had bowed t women’s demands as it ordered that the laws be changed in their favour. It is difficult to know how this ruling will affect businesses as they set their prices in the coming years. Experts consider that the insurance industry will not be affected as much as people fear that it will.
The insurance industry will likely continue to grow in 2011 and beyond as it demands greater market share. Legal & General is no exception as its market share increases in the short to medium term.
