AXA will pilot its Enhanced Annuity proposition with specialist IFA firm Hargreaves Lansdown, it has announced.
The firm says the product, offered by AXA Wealth Management, differs from a standard annuity as the consumer is assessed on their medical and lifestyle conditions as well as age and gender.
It says it aims to provide higher income than a standard annuity as health is taken into account and those with a risk of lower life expectancy can gain a higher annual income from their pension fund as a result.
The pilot has been developed as part of AXA Wealth Management's proposition to meet the requirements of the retirement market.
It says the pilot will help identify the critical success factors and differentiation required for a full market launch.
In addition, it says the pilot has been designed so the customer is clear about the annuity rate they will receive.
Quotes are offered with a 14 day guarantee on the rate. This element is designed so the customer has no ambiguity on the actual rate that they will receive and also supports advisers through the quote and new business stages of the process.
David Wade, enhanced annuity product manager, AXA Wealth Management, says: “The market for enhanced annuities is growing rapidly and it therefore represents a significant opportunity for us.
“By running with this pilot we are keen to test our capability and the appetite in the Enhanced Annuity market in order to confirm the attractiveness of the market and build our reputation as an innovative provider of retirement income solutions.
“We are delighted that Hargreaves Lansdown is taking part in the pilot. The firm's knowledge and understanding of client needs when it comes to retirement solutions will be key to ensuring the proposition we go to market with is entirely accessible and relevant for the end consumer.
“The firm has a great deal of experience in this area and run their own annuity supermarket for clients.”
Nigel Callaghan, pensions analyst, Hargreaves Lansdown, adds: “If we are going to help investors get better value for money, this market has to develop and the introduction of innovative annuity solutions is an important part of this.
“AXA's solution allows them to get a much clearer idea of the life expectancy of consumers and therefore calculate a more realistic income.”
AXA is testing its Enhanced Annuity proposition with a small group of annuity specialist IFA firms.
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