Phoenix to invest in Standard Life brand

Phoenix Group's offices in Lothian Road, Edinburgh

Closed life and pension fund consolidator Phoenix Group Holdings plc, owner of the “old” Standard Life Assurance, said on Wednesday it plans to grow its business of new policies following a takeover of the entire Standard Life brand earlier this year.

Phoenix specialises in buying books of life insurance business closed to new customers — then using economies of scale to manage them more efficiently.

But after buying the entire Standard Life brand from Edinburgh-based abrdn in February, Phoenix will also look to develop its open books, chief executive Andy Briggs told Reuters.

“We would consider larger or smaller businesses, we will consider open books or closed,” said Briggs.

Phoenix has £1.4 billion which could be available for deals, Reuters reported.

Briggs said the insurer “wouldn’t be at all perturbed if we didn’t do another deal in the next year or so.”

Briggs said Phoenix would also keep Standard Life International, which has operations in Germany and Ireland, following a review, and could use it as a base for expansion in Europe.

Standard Life Aberdeen — now called abrdn — sold Standard Life Assurance Limited to Phoenix Group Holdings for £3.28 billion in August 2018 — then sold the entire Standard Life brand to Phoenix in February, 2021.

abrdn retains a 14.4% stake in Phoenix Group and the two firms have an asset management partnership that has been extended to at least 2031.

Also on Wednesday, Phoenix Group announced first-half results showing operating profit rose 46% to £527 million, below the £539 million forecast in a company-compiled consensus poll.

The group reported strong H1 cash generation of £872 million, up from £433 million in H1 of 2020, and said it is on track to deliver at the top end of its £1.5 billion to £1.6 billion target range for FY 2021.

Interim dividend rose to 24.1p per share from 23.4p last year.

Assets under administration fell to £304 billion at June 30, 2021, from £338 billion at December 31.

Phoenix reported a pretax loss of £454 million for the six months ended June 30, compared to a profit of £611 million for the same period last year.

Phoenix Group CEO, Andy Briggs said: “Phoenix has made further strong progress against our stated priorities of cash, resilience and growth.

“Our cash generation doubled to £872 million, we maintained a highly resilient balance sheet and we delivered 15% growth in new business long-term cash generation to £412 million.

“I am also pleased with the strategic progress we made in the period.

“Our ownership of the Standard Life brand will support our Open growth strategy, while the disposal of Ark Life will maximise value for shareholders and simplify our European operations.

“We remain fully committed to our sustainability agenda which is aligned with our purpose of ‘helping people secure a life of possibilities’.

“We have made good progress against our sustainability targets, including directing almost £800 million of long-term investment into ESG-related projects and we remain well placed to support the UK to build back better and greener.

“We look forward to continuing to execute against our strategic priorities in the second half of the year as we build on our position as the UK’s largest long-term savings and retirement business.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.