View more on these topics

Phoenix profits halve following Ignis sale

Phoenix Group 480 Wythall office Birmingham

Closed book insurer Phoenix Life has seen pre-tax profits fall by 45 per cent in the first six months of the year following the sale of Ignis Asset Management.

Pre-tax profit fell from £256m to £141m, while group operating profits fell by 49 per cent from £266m in the first half of 2014 to £135m this year.

Last year Ignis Asset Management contributed £17m to operating profits, but was sold to Standard Life Investments for £390m in April 2014.

A Phoenix spokeswoman says profits were hit by the sale and added the firm’s profits tend to be “lumpy”.

Cash generation also fell by 67 per cent from £332m to £110m. But Phoenix says it “remains on track” to achieve its target of over £200m in cash generation over the whole year.

In line with other insurers, annuity sales have fallen since the pension reforms were announced in the 2014 Budget.

However, Phoenix only writes contracts for its own customers – many of whom have policies with valuable guaranteed annuity rates – so sales have fallen less than at other firms.

It wrote annuities totalling £208m in the first half of the year, down from £284m in the same period last year.

Volumes of policies without guaranteed rates have dropped by 47 per cent over the period.

Group chief executive Clive Bannister says he does not expect Phoenix to be caught by the FCA’s investigation into cross subsidies applied by annuity providers.

The Treasury is also consulting on taking action on early exit charges on pensions policies.

But Bannister says the average exit charge on the firm’s unit-linked policies is around 1 per cent.

Separately, Phoenix has announced that WH Smith chair Henry Staunton has replaced former FSA chairman Sir Howard Davies as group chairman.

Recommended

Lowe-Steve-700.jpg

Phoenix signs up to Just Retirement simplified advice service

Closed book insurer Phoenix is the first provider to sign up to Just Retirement’s new simplified advice service. The deal means retiring customers who do not have an adviser will be able to get personal recommendations over the phone on how to use their pension pot, including whether to keep their funds invested, take lump […]

Wales-Welsh-Pound-Coin-700.jpg

Phoenix boosts with-profits annual bonus payouts

Over three quarters of closed-book insurer Phoenix’s with-profit policies will receive an annual bonus this year as a result of improved investment performance, the firm says. This represents a significant increase on 2013, when 62 per cent of policies received an annual bonus. In 2012 this figure was just 39 per cent. Phoenix says final, […]

Friends-Life-Building-700x450.jpg

Friends Life mulled deal with Phoenix

Friends Life reportedly held talks with closed book provider Phoenix alongside its negotiation with Aviva. City AM reports talks were held between Friends and Phoenix on an informal basis and are not ongoing. If the Aviva deal does not proceed, Friends may revert to pursuing another deal and possibly return to Phoenix. One source told […]

Business-General-Handshake-Hire-Appointment-700x450.jpg

Guardian acquires £1.7bn of annuity assets from Phoenix

Guardian Financial Services has acquired £1.7bn of annuity assets from closed pension provider Phoenix for an undisclosed sum. The agreement will see 50,000 policies transferred to consolidation firm Guardian, which will now manage £17bn of assets on behalf of 900,000 customers in the UK and Ireland. In June 2012, Phoenix transferred £5bn of annuity assets […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment