The upheaval in the variable annuity market may create new opportunities for insurers, a market research firm says.

Analysts at Financial Research Corp., Boston, make that argument in a commentary based partly on a survey of 268 advisors and a survey of 6 large VA manufacturers.

Investors are more willing to pay these days for protection against the possibility of loss of principal, but absolute return funds, managed-payout funds, principal-protection funds and other products will compete with VA living benefits guarantees for those investors’ assets, FRC analysts write in the commentary.

Uncertainty about the economy and the direction of federal financial services regulation could discourage many insurers from developing new products and product features over the next 18 months, the FRC analysts write.

In the long run, increases in taxes on wealthy investors could increase the appeal of VA living benefits options, the analysts predict.

The FRC analysts are suggesting that one simple way to stand out in the VA market may be to cut mortality and expense charges by reducing upfront sales commissions: 81% of the advisors surveyed said they would sell at least as many VA products if commissions were lower.

Roughly one-fifth of the advisors who said their VA sales would increase told FRC that cutting VA commissions would improve the image of the product, and 21% said they personally would feel better about the product if commissions were lower.