The UK Life insurance industry is ‘under intense political scrutiny and we expect further reforms', Standard & Poor's has warned in a new report.
While the industry and country risk for the UK's insurers is low, the report warns that changes to the government and increased focus on pensions and savings has increase uncertainty.
The report also notes that the industry has been developing its protection offering.
In recent months Canada Life has re-entered the UK individual protection market and AIG Life launched a whole of life policy, among other moves in the industry.
The report also notes that there is more need for consumer advice as consumers now have more choices of products.
A statement from Standard & Poor's said: "Our assessment captures the typical level of risk that life insurers operating in the U.K. face, and reflects our view of very low country risk and intermediate industry risk.
"In our view, the U.K. life insurance industry is under intense political scrutiny and we expect further reforms.
"The sector has successfully adapted its business model to the recent political and regulatory developments.
"During the past years, the industry has broadened its product and risk profile.
"It has focused on more flexible at-retirement propositions and built up pension
sales to offset the recent decrease in individual annuities, while also developing its protection offering.
"Meanwhile, a few players have achieved a robust position and demonstrated their competitive advantages in the bulk annuity market by securing sizable transactions."
The statement added: "In our view, the recent reforms have also created opportunities. Broader options have increased the need for consumer advice, and political attention has focused on retirement planning.
"Auto-enrolment may create a closer relationship with customers within the workplace."
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