ABI: Insurance industry initiative will improve annuity transfer times

ABI: Insurance industry initiative will improve annuity transfer times

ABI: Insurance industry initiative will improve annuity transfer times

The ABI (Association of British Insurers) has today announced details of its work with the UK’s leading annuity providers to speed up the time it takes for Open Market Option payments to be made to pensioners.

15 providers, representing over 90% of the annuities industry, are involved in the initiative, which involves the creation of an electronic information exchange developed by Origo, the financial services e-commerce standards body. The objective of the service is to reduce the time taken to set up an annuity when changing providers and will become the industry benchmark.

Maggie Craig, the ABI’s Director of Life and Savings, said:

“This initiative marks a step change in the industry’s work to improve customer service around the Open Market Option. The ABI and the annuity providers involved are determined to make the annuity set-up process work better, and this service will reduce the time taken to transfer between providers.

“The ABI has already published new template wording for ‘wake up’ letters sent to people who are approaching retirement. This will help make the options customers have at retirement clear and easy to understand. The Open Market Option is prominently featured and explained, alongside all the different types of annuities that are available.

“Together, these initiatives support the work providers are doing to improve set-up times and ensure that people have the information they need to make an informed decision at retirement.”

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Notes for Editors

1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. The initiative is named Options – Open Market Pensions Transfer Service.

3. The companies participating in the Options initiative are: AEGON, AXA, Canada Life, Friends Provident, Just Retirement, Legal & General, MetLife, Norwich Union, Partnership, Prudential, Pearl Group (including Resolution), Scottish Widows, Skandia, Standard Life and Zurich. Other companies are expected to join the scheme in due course.

4. The specific aim of the initiative is to reduce the time that it takes providers to transfer information and funds between them required to set up an annuity. The initial target is within 30 calendar days from the point the provider receives the application to the point at which the annuity is set-up, but the intention is that this target will be reduced over time.

5. The initial focus for the service will be on transfers from individual personal pensions, group personal pensions, stakeholder pensions and free-standing AVCs. The scope will be widened in 2009 to support additional products, and also pension-to-pension transfers.

6. ABI will publish quarterly updates of the performance achieved in terms of the transfer process. The providers involved will be testing the service in October and November and, subject to the results of the tests, will go live in December 2008. ABI has consulted FSA and the Treasury on the initiative, and is working with HMRC and the DWP to address causes of transfer delays that are beyond providers’ control.

7. The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

8. An ISDN line is available for broadcasts.

Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk