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Phoenix and Admin Re merger collapses

Insurers failed to agree terms on a proposed £3bn merger.

Phoenix Life’s proposed takeover of closed life insurer Admin Re has collapsed after the two parties failed to agree terms.

In July, closed-book life consolidation vehicle Phoenix confirmed it was in early stage talks with Admin Re, a subsidiary of Swiss Re, about a possible £3bn merger.

However, in a joint statement issued last week the companies said: “Further to the statement on 12 July by Phoenix Group Holdings regarding its preliminary discussions with Swiss Re in relation to a possible combination of Phoenix and Swiss Re’s UK Admin Re business unit, Swiss Re and Phoenix today confirm such discussions have terminated as the parties have been unable to agree the terms on which a mutually acceptable transaction could take place.”

Phoenix, formerly known as ‘Pearl’, is the largest consolidator of closed life assurance funds in the UK, with over £68bn in assets under management and six million policyholders.

The firm says it remains “on track” to achieve the top end of its 2013 cash generation target of between £650m and £750m, having already achieved £734m of cash generation so far.

Admin Re has completed 50 blocks of business since 1998, including the acquisition of 300,000 policies and £1.6bn in assets from American Life Insurance Company, or Alico, in 2011.

It has previously cited the UK as a key area of potential growth and says it will “continue to seek to fully establish its franchise value in the UK and continental Europe”.

Chase de Vere head of communications Patrick Connolly says: “Even though this deal fell through I expect to see further consolidation in the UK life industry. That is positive from an economies of scale perspective but could lead to less choice for advisers and consumers.”

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