The investigation by City watchdog the Financial Services Authority, launched yesterday, will focus on whether people who buy an annuity directly from their pension provider pay more than they would if they shopped around.
The regulator will also look into whether insurers hinder their customers from shopping around under the Open Market Option.
The industry is obliged under FSA rules to inform pension savers that they have a right to compare annuity rates across the market.
Resolution and Standard Life sell annuities mainly to their own pension customers, and therefore potentially have the most to lose from the probe, analysts said.
“A successful FSA investigation would logically impact on those companies primarily selling only to their in-house customers,” Deutsche Bank’s Oliver Steel wrote in a note to clients. “There is a risk that in-house annuity providers such as Standard Life and Resolution lose out.”