Legal & General (L&G) has branded advice too expensive to produce products to support the Government's reduction on welfare spending.
The provider also suggested the insurance sector has the capacity to play a role as much of the work it does overlaps the bounds of the Department of Work and Pensions (DWP).
However, speaking at the Reforming Welfare conference, Tim Breedon, Group CEO of L&G explained how he felt the cost of advice and regulation was restricting insurers' ability to produce simpler and cheaper products.
Breedon is also due to take on the role of chairman of the Association of British Insurers next month.
"Looking at the costs associated with insurance and savings products, they are largely the costs of distribution and particularly the cost of advice and regulation," he said.
"To develop cheaper products to meet this demand they need to be repeatable to sell to multiple numbers of people in high volume, without also having to bare other peoples costs, possibly in some cases, over engineered costs for the type of product or customer that we are talking about.
"These are particularly important with distribution and regulation which I think is something the Government, through reforms, really needs to address.
"Otherwise I'm afraid however cheaply and simply we manufacture that product we won't get a simple product at the right price to the right customers," he added.
This claim was disputed by the British Insurance Brokers' Association (BIBA), which believes the cost of advice is minimal and that IFAs are not the cause for concern in the market.
Peter Staddon, head of technical services at BIBA, suggested that many of the pitfalls for clients in current insurance markets were due to banks using non-advised sales.
"When you look at the cost of distributing protection products it isn't huge," he said. "What the broker can do is look at what the client actually needs.
"One of the biggest problems with the banks is they are selling unemployment cover to people who are self employed, and you can't active it if you're self-employed.
"That proves to me that they are not competent to do the job.
"Surely the idea is to do it once and to do it right, you get somebody who is qualified, and if it does go dreadfully wrong you've got FOS to come in and say no you got it wrong," he added.
