The reinsurer said combined with the recent European ruling on gender that will see women’s premiums rise by up to 20%, the change to tax rules for insurers announced in yesterday’s Budget could add a further 10% on premiums for life offices affected.
David Gulland, managing director of reinsurer RGA, said: “There are a number of issues in the protection market right now that could drive life cover premiums upwards.
“We’ve seen the recent ECJ ruling on gender, and now the industry also needs to adapt to changes in the tax regime, such as income minus expenses, which take effect from the end of next year.
“While the full implications of these and other changes, such as solvency II are yet to be fully understood and will vary by individual company, combined they could typically push rates up for some companies by 30% for females buying life cover.”
The tax change, due at the end of 2012, will see insurance companies with an investment arm no longer able to offset the costs of running their protection business against investment.
Protection specialist Kevin Carr said this could increase costs at insurers affected by the change.
He said: “Some offices will welcome this more than others. It all depends on the investment position of insurers. The important thing for brokers is that this offers them a reason to have a conversation with their clients about arranging protection before the change takes effect.”
