Phoenix boosts dividend on 'record' results
Phoenix Group has upped its dividend after annual cash generation exceeded expectations, the blue chip life insurer said on Monday.
The group, which owns Standard Life and ReAssure, among others, said cash generation for the year to 31 December 2021 was £1.72bn, marginally higher than 2020’s £1.71bn and well above internal targets for between £1.5bn and £1.6bn.
New business long-term cash generation was £1.18bn, compared to £766m in 2020, while operating profits rose to £1.23bn from £1.20bn. Assets under administration were £310bn as at 31 December, compared to £307bn a year previously.
As a result, the firm said it was recommending increasing the final dividend by 3%, its first organic increase, to 24.8p per share. It also announced a shift in dividend policy, with the focus moving from "stable and sustainable" to a sustainable payout that "grows over time".
Chief executive Andy Briggs said: "It has been an outstanding year for Phoenix, with a record set of financial results and a significant strategic progress made as we fully embrace our purpose.
"2021 marked a pivotal moment, with £1.2bn of new business from our open business more than offsetting the run-off of our heritage business for the first time. This demonstrates that Phoenix is a growing, sustainable business and enabled the board to recommend our first ever organic dividend increase of 3%."
Previously, Phoenix - which acquired ReAssure from SwissRe in 2020 in a £3.2bn deal - had relied on mergers and acquisitions to fund payout increases.
Looking to the current year, Phoenix added that it expected to generate new cash of between £1.3bn and £1.4bn. It also confirmed a three-year cash generation target of £4bn.
The firm’s solvency II surplus was £5.3bn as at 31 December, in line with the previous year, while the solvency II capital coverage ratio was 180% compared to 164% a year earlier. SCCR is currently at the top end of Phoenix’s target range of 140% to 180%, the firm noted.