Phoenix Group Holdings plc (“Phoenix Group” or “the Group”) today announces that it completed four Bulk Purchase Annuity (BPA) transactions during the second half of 2021 covering £4.0 billion of premiums, comprising £3.6 billion of external deals and a further £0.4 billion tranche of the Group’s Pearl Pension Scheme.
This equates to total BPA premiums of £5.5 billion contracted for the year (FY20: £2.5 billion). The capital strain for all BPA transactions written in 2021 is currently expected to be c.6.5% (FY20: 9%) and the cash multiple c.2.6x (FY20: 2.3x), with the second half transaction economics reflective of the current low credit spread environment.
This strong performance highlights Phoenix’s success in driving organic growth, and reflects the investment the Group is making into both its Open business and internal asset management function. Phoenix is building a market-leading BPA team and asset sourcing capability, which supports a comprehensive BPA solutions offering that is now distributed to the market under the Standard Life brand.
As a result, Phoenix Group now expects to deliver in excess of £1 billion of total new business long-term cash generation for 2021, which will more than offset the run-off of the in-force business (currently c.£0.8 billion of annual cash generation).
Andy Briggs, CEO of Phoenix Group, commented:
“I am delighted with the progress we are making in building a market-leading Bulk Purchase Annuity business which contracted £5.5 billion of premiums in 2021, more than double our 2020 premiums.
As a result, we have now delivered on our ambition for our new business cash generation to more than offset the run-off of our Heritage business and have “proven the wedge”.
This reflects the investment we are making into our growing Open business and the Standard Life brand, which supports us in delivering Phoenix’s purpose of helping people secure a life of possibilities.”
Phoenix Group’s Full Year 2021 Results will be announced on Monday 14th March 2022.
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This announcement in relation to Phoenix and its subsidiaries (the “Group”) contains forward-looking statements about the Group’s current plans, goals and expectations relating to future financial events, conditions, performance, results, strategy and/or objectives. Statements containing the words: ‘believes’, ‘intends’, ‘will’, ‘expects’, ‘may’, ‘should’, ‘plans’, ‘aims’, ‘seeks’, ‘continues’, ‘targets’ and ‘anticipates’ or other words of similar meaning are forward-looking. Such forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the Group’s control. As a result, such future events and the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set out in the forward-looking statements in this announcement. The Group undertakes no obligation to update any of the forward-looking statements contained within this announcement.