Phoenix Group said it has increased its cash generation targets after completing “the funds merger of the Standard Life and Phoenix Life businesses into Phoenix Life Limited.”
Phoenix said the funds merger through a “Part VII transfer” of Standard Life and Phoenix Life businesses into a single entity has been completed.
The group said the merger completion “leads to a material one-off upgrade to the group’s 2023 cash generation target from £1.3-to-1.4bn to c.£1.8bn; the group’s three-year cash generation target consequently increases from £4.1bn to £4.5bn across 2023-2025.”
Phoenix Group shares rose about 5%.
Phoenix Group CEO Andy Briggs said: “The completion of the funds merger of the Standard Life and Phoenix Life businesses into Phoenix Life Limited, bringing together 8 million policies, is one of the largest UK insurance Part VII transfers ever completed.
“This reaffirms Phoenix Group’s position as the UK’s leader at delivering cost and capital synergies and generating value for customers and shareholders.
“This funds merger enables us to materially upgrade our cash generation targets and creates further balance sheet optionality for the group.”
Phoenix Group said this was “one of the largest UK insurance Part VII transfers ever completed, bringing together the businesses of four legal entities, comprising c.8 million policies and c.£200 billion of assets into a single entity.”
Phoenix added: “The group therefore now expects to deliver c.£1.8 billion of cash generation in 2023, a significant increase relative to our previous target range of £1.3-to-£1.4 billion.
“Consequently, the group’s three-year cash generation target across 2023-2025 is also increased to £4.5 billion, up from £4.1 billion previously.
“As a result, the group expects to have significant surplus cash at its holding company at the end of 2023, which creates further balance sheet optionality.
“Phoenix Group looks forward to presenting an evolved financial framework with enhanced disclosures and an update on capital allocation in the near term, alongside its Full Year 2023 results announcement in March 2024.”