Phoenix confirms £3.2bn ReAssure deal on track as it hails strong year

Phoenix Group hailed a “strong year” on Monday after the closed life assurance and pensions consolidator posted a sharp increase in annual profits.

The blue chip, which buys and operates corporate pension schemes, reported a consensus-beating 14% increase in operating profits to £810m for the year to 31 December, while cash generation beat internal targets, improving to £707m from £664m.

Clive Bannister, outgoing chief executive, said it had been a “strong year” for Phoenix: “We beat our cash generation target, made significant progress in the transition of Standard Life Assurance and announced the £3.2bn acquisition of ReAssure.”

Nicholas Lyon, chairman, added that Phoenix was “strategically positioned to capture future opportunities in the life and pensions industry. The ReAssure transaction will deliver £7bn of incremental cash generation and, alongside supporting the dividend, will give us an enhanced platform to pursue further growth opportunities.” The ReAssure deal is set to complete mid-2020, subject to regulatory approvals.

Phoenix is targeting cash generation of between £800m and £900m in the current year, and increased its five-year cash generation target by £0.1bn to £3.9bn for new business written during 2019.

Bannister is retiring later this month and will be replaced by Andy Briggs, the former head of Friends Life and Aviva UK.

Separately, Phoenix announced that group finance director Jim McConville was retiring after eight years with the company, and would be replaced by his deputy, Rakesh Thakrar.