IFA-dependent life insurers will be worst hit by Retail Distribution Review
Thu, 25 Feb 2010
Life insurers that are dependent on small adviser firms to sell their policies stand to be hit hardest after the Retail Distribution Review (RDR) is implemented in 2012, according to Fitch Ratings .

David Prowse, senior director at Fitch's Insurance rating group, warns that although large insurers offering simple investment products through low-cost channels will benefit from the RDR, those dependent on small adviser firms to sell policies may lose out. A recent report published by Fitch Ratings said that the RDR will have a significant impact on certain individual life insurance companies unless they diversify their distribution channels.

Mr Prowse stated that the most noteworthy proposal in the review is that financial advisers will no longer receive sales-based commissions from insurers and that advisers will instead charge customers directly. The report said that as a result, some short-term market disruption is expected as both advisers and consumers adapt to the new rules.
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