The challenge for the insurance industry

The stakeholder pension will, of course, have a huge impact on the life assurance industry. It completely changes the business model from the life assurance business model to the investment fund model. The life assurance model typically locked people into long-term contracts, made sure they got extremely poor value if they did not last the course, and had to be poor value because the product manufacturers required all their distribution and set-up costs to be recovered in the early years. The long-term costs could be made to look low because so few investors lasted the full term, so they...