This has meant insurers have only been targeting customers able to pay large premiums in order to break even.Ron Sandler, the former Lloyd's of London chief executive who was asked by the Treasury to investigate retail savings, has already recommended the introduction of a new range of simple, easier to understand, savings products with limited charges. The ABI wants a review of the 1 per cent charge cap before more price controls are introduced.Research undertaken by Oliver Wyman & Co on behalf of the ABI, published yesterday, shows simple savings products with built-in safety features would encourage more people on lower incomes to start savingOliver Wyman identified last year there is a £27bn shortfall in what people are saving in order to enjoy a comfortable retirement. It has found simple products, with less red tape around how they are sold, could boost savings by as much as £5bn a year, but price controls make the cost of selling such products prohibitive.Francis McGhee, head of life insurance at the ABI, said: "This research shows simple products could make a £5bn dent in the UK savings gap, but these products will not walk off the shelves. A 2 per cent annual charge would allow us to cut the gap by more than twice as much as 1 per cent."The report found that, under current regulatory restrictions, in order to sell a policy to someone only able to afford to pay in £20 a month, companies need to charge 5.85 per cent to break even.Mr McGhee said many insurance companies no longer have enough capital available to continue financing such low charging products. Some companies are already starting to withdraw from the market because the business is unprofitable. "There are signs some companies are changing their original views on the stakeholder market The access to capital they have is now very different. There was a race for market share at a time when stockmarkets were higher and capital available was high.

We are now seeing a retrenchment," he said.Insurance companies welcomed the findings. Peter Hales, sales and marketing director at Norwich Union, said higher charges would give more providers more scope to actively sell savings products to a wider audience.. RSA's shares fell 2p to 106p.The concerns of the ratings agencies do not surround RSA's ability to meet its current liabilities. But they believe RSA does not have enough capital to fund the rapid expansion of its general insurance business at a time when premiums are surging and its competitors are rushing to write large amounts of profitable business.RSA has been trying to raise capital in the last 12 months by disposing chunks of its business it deems to be "non-core". It has so far raised £725m of its target sum of £800m.Analysts believe this figure is no longer enough, due to the continuing fall in stock markets, which have eroded the value of its assets.Mr Button said: "The environment has changed. The equity markets have fallen, and it has become more challenging for insurers to release capital through disposals or raise external capital through equity or debt."RSA reiterated that it did plan to raise more capital.

It said in a statement: "We are actively pursuing a number of actions to improve our capital position and it is our intention that these should put us in a position to regain our A+ credit rating."The City has speculated that RSA would organise a massive rights issue, but the company has shelved the plan because the level of discount would have to be around 40 per cent, according to analysts. Alternatives include increasing its debt or boosting its reinsurance.. The chief executive of Carnival Corporation, the US cruise ship operator fighting a hostile bid battle for P&O Princess, admitted yesterday that the chance of his bid being cleared by American competition authorities "was less than 50 per cent". "If they see the market the way Royal Caribbean positions it, they will reject both [deals].