• APRA to consult on changes to capital settings for annuity products
• Proposed changes expected to lower required capital levels for annuities
• Changes will support increased take-up of longevity solutions and grow the annuity market

Challenger Limited (ASX:CGF) has strongly supported APRA's announcement to undertake a consultation on changes to capital settings for annuity products. The proposed key changes are expected to lower the levels of required capital for annuity products, provided certain risk controls are in place. This will deliver significant benefits to Australian retirees, the industry and the broader economy. A more market-sensitive approach will support increased take-up of longevity solutions and therefore grow the annuity market. It will promote innovation and competition in the lifetime income market and support the development of a long-duration domestic bond market. The changes will also reduce cyclical risks to life insurers' balance sheets and reduce capital volatility through closer alignment of asset and liability valuations, while retaining a robust and secure capital framework. Challenger's CEO, Nick Hamilton, stated that these amendments will be a 'game changer' for the industry, providing greater support to Australian retirees and an important opportunity to put Australia's long-term superannuation savings to work, critical to building a productive and resilient economy.

The proposed changes to capital settings for annuity products are expected to lower required capital levels, supporting increased take-up of longevity solutions and growth in the annuity market. This will promote innovation and competition in the lifetime income market and support the development of a long-duration domestic bond market.