Phoenix stops SunLife sale; Standard Life grows 83%

Phoenix Group-Standard Life office in Lothian Road, Edinburgh

Phoenix Group Holdings plc, owner of Standard Life, said on Monday it has decided to discontinue the sale process for its SunLife business “given the current uncertainty in the protection market.”

Phoenix said: “SunLife is a leading provider of financial protection products direct to the over 50s market in the UK and a valuable asset which contributes to the group’s new business growth.

“Given the current uncertainty in the protection market, the board has decided to discontinue the sale process and will focus on enhancing the value it generates within the group.”

The news came as Phoenix published results for the first half of 2024, in which it declared a 2024 interim dividend of 26.65p per share, equal to its 2023 final dividend, and a 2.5% increase compared to the 2023 interim dividend.

The group reported first-half total cash generation of £950 million (H1 2023: £898m) and said it is confident of delivering at the top-end of its £1.4 billion-£1.5 billion target range for 2024.

Phoenix said first-half FRS adjusted operating profit increased 15% to £360 million “driven by profitable growth in both Pensions and Savings (£149m) and Retirement Solutions (£210m).

Standard Life CEO Andy Curran said Standard Life’s workplace business delivered 83% growth in net fund flows to £3.3bn as the business retained existing customers and won new schemes.

Curran said: “Flows into our Workplace business are up 83% year-on-year as a result of the investments we’ve made in our proposition. Our Master Trust in particular is growing strongly and assets exceeded £10bn for the first time earlier this year.

“Sponsors and trustees of defined benefit schemes are looking to take advantage of their strong funding position and secure member benefits through Bulk Purchase Annuities and we have a strong pipeline of deals ahead.

“Another major focus for us has been on broadening our retirement offer and in particular creating solutions that provide people with greater certainty of income in retirement.

“We were the first new provider to enter the annuity market since pension freedoms and have experienced strong demand from customers since doing so.

“We’ve added further choice since with the addition of a smoothed fund in partnership with Fidelity and just last week Standard Life launched a fixed term annuity for those looking for income certainty for a set period of time.”

Phoenix Group CEO Andy Briggs said: “Phoenix’s vision is to be the UK’s leading retirement savings and income business, and I am pleased with the initial progress we have made in executing on our 3-year strategy, as our 2024 interim financial results demonstrate.

“We have delivered 19% growth in Operating Cash Generation and remitted total cash generation of £950 million in the first half.

“We have generated 3%pts of recurring Solvency II capital and our resilient balance sheet has enabled us to repay £250 million of debt and to invest in our business. Strong growth in our capital-light Pensions and Savings business in particular has supported a 15% increase in operating profit.

“The Board has declared an Interim dividend which is a 2.5% year-on-year increase.

“I am confident that as we continue to execute on our strategy we are building a growing business that is on track to deliver our financial targets and create shareholder value.”

Standard Life said that in the Bulk Purchase Annuity market (BPA), £1.7 billion of annuity premiums were written in H1 2024 with a strong pipeline of opportunities in place.

“Since the end of June, the business wrote a further £400m in BPA and is working on additional transactions valued at £2.2bn, on an exclusive basis,” said Standard Life

“In August, Phoenix Group announced agreement with Schroders to launch Future Growth Capital (FGC), the first private market investment manager established to promote the objectives of the Mansion House Compact in the UK. Importantly, FGC will provide Standard Life policyholders with access to a broader range of assets.”