REG - Phoenix Group Hldgs - Upgrade of near-term cash generation targets

Phoenix groupAnnouncement

13/11/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231113:nRSM1625Ta&default-theme=true

RNS Number : 1625T  Phoenix Group Holdings PLC  13 November 2023

 

LEI: 2138001P49OLAEU33T68

 

This announcement constitutes inside information as stipulated under
the UK version of the Market Abuse Regulation no 596/2014 which is part of
English law by virtue of the European (withdrawal) act 2018, as amended.

 

Phoenix Group upgrades near-term cash generation targets on completion of
funds merger through a Part VII transfer

·    Funds merger through a Part VII transfer of Standard Life and Phoenix
Life businesses into a single entity completed

·    Leads to a material one-off upgrade to the Group's 2023 cash
generation target from £1.3-to-1.4bn to c.£1.8bn; the Group's three-year
cash generation target consequently increases from £4.1bn to £4.5bn across
2023-2025

·    Increased cash generation targets create further balance sheet
optionality for the Group

 

Commenting on the announcement, Phoenix Group CEO, Andy Briggs said:

"The completion of the funds merger of the Standard Life and Phoenix Life
businesses into Phoenix Life Limited, bringing together 8 million policies, is
one of the largest UK insurance Part VII transfers ever completed. This
reaffirms Phoenix Group's position as the UK's leader at delivering cost and
capital synergies and generating value for customers and shareholders. This
funds merger enables us to materially upgrade our cash generation targets and
creates further balance sheet optionality for the Group."

Phoenix Group Holdings plc ("Phoenix Group" or the "Group") today announces
that it has completed the Part VII transfer of its Standard Life(1) and
Phoenix Life Assurance Limited businesses into Phoenix Life Limited. This is
one of the largest UK insurance Part VII transfers ever completed, bringing
together the businesses of 4 legal entities, comprising c.8 million policies
and c.£200 billion(2) of assets into a single entity.

Executing our strategic priorities strengthens our competitive advantages of
capital efficiency, customer access, and cost efficiency. Our strategic
priority of 'enhancing our operating model and culture' is designed to support
us in delivering leading cost efficiency and a modern organisation. The
completion of these transfers marks the successful execution of a key action
in support of this priority and supports our ambition of delivering a single
best way of doing things for our customers.

The Part VII transfer creates additional free surplus within our life
companies through the realisation of the diversification benefit associated
with our internal model harmonisation management action completed in 2021,
which enables the Group to announce the one-off upgrade of its near-term cash
generation targets today.

The Group therefore now expects to deliver c.£1.8 billion of cash generation
in 2023, a significant increase relative to our previous target range of
£1.3-to-£1.4 billion. Consequently, the Group's three-year cash generation
target across 2023-2025 is also increased to £4.5 billion, up from £4.1
billion previously.

As a result, the Group expects to have significant surplus cash at its holding
company at the end of 2023, which creates further balance sheet optionality.

Phoenix Group looks forward to presenting an evolved financial framework with
enhanced disclosures and an update on capital allocation in the near term,
alongside its Full Year 2023 results announcement in March 2024.

The person responsible for arranging for the release of this announcement on
behalf of Phoenix Group is Kulbinder Dosanjh, Group Company Secretary.

 

 

 

 

Enquiries

Investors/analysts:

Claire Hawkins, Director of Corporate Affairs and Investor Relations, Phoenix
Group

+44 (0)20 4559 3161

Andrew Downey, Investor Relations Director, Phoenix Group

+44 (0)20 4559 3145

Media:

Douglas Campbell, Teneo

+44 (0)7753 136 628

Shellie Wells, Corporate Communications Director, Phoenix Group

+44 (0)20 4559 3031

Footnotes

(1) Standard Life refers to Standard Life Assurance Limited and Standard Life
Pension Funds Limited.

2 Year end 2022 values

Legal Disclaimers

This announcement in relation to Phoenix Group Holdings plc and its
subsidiaries (the 'Group') contains, and the Group may make other statements
(verbal or otherwise) containing, forward-looking statements and other
financial and/or statistical data about the Group's current plans, goals,
ambitions, outlook, guidance and expectations relating to future financial
condition, performance, results, strategy and/or objectives.

Statements containing the words: 'believes', 'intends', 'will', 'may',
'should', 'expects', 'plans', 'aims', 'seeks', 'targets', 'continues' and
'anticipates' or other words of similar meaning are forward looking.  Such
forward-looking statements and other financial and/or statistical data involve
risk and uncertainty because they relate to future events and circumstances
that are beyond the Group's control. For example, certain insurance risk
disclosures are dependent on the Group's choices about assumptions and models,
which by their nature are estimates. As such, actual future gains and losses
could differ materially from those that the Group has estimated.

Other factors which could cause actual results to differ materially from those
estimated by forward-looking statements include, but are not limited to:
domestic and global economic, political, social, environmental and business
conditions; asset prices; market related risks such as fluctuations in
investment yields, interest rates and exchange rates, the potential for a
sustained low-interest rate or high-interest rate, environment, and the
performance of financial or credit markets generally; the policies and actions
of governmental and/or regulatory authorities, including, for example,
initiatives related to the financial crisis, the COVID-19 pandemic, climate
change and the effect of the UK's version of the "Solvency II" regulations on
the Group's capital maintenance requirements; the impact of changing inflation
rates (including high inflation) and/or deflation; the medium and long-term
political, legal, social and economic effects of the COVID-19 pandemic and the
UK's exit from the European Union; the direct and indirect consequences of the
European and global macroeconomic conditions of the Russia-Ukraine War and
related or other geopolitical conflicts; information technology or data
security breaches (including the Group being subject to cyberattacks); the
development of standards and interpretations including evolving practices in
ESG and climate reporting with regard to the interpretation and application of
accounting; the limitation of climate scenario analysis and the models that
analyse them; lack of transparency and comparability of climate-related
forward-looking methodologies; climate change and a transition to a low-carbon
economy (including the risk that the Group may not achieve its targets);
market competition; changes in assumptions in pricing and reserving for
insurance business (particularly with regard to mortality and morbidity
trends, gender pricing and lapse rates); the timing, impact and other
uncertainties of proposed or future acquisitions, disposals or combinations
within relevant industries; risks associated with arrangements with third
parties; inability of reinsurers to meet obligations or unavailability of
reinsurance coverage; the impact of changes in capital, and implementing
changes in IFRS 17 or any other regulatory solvency and/or accounting
standards, and tax and other legislation and regulations in the jurisdictions
in which members of the Group operate.

As a result, the Group's actual future financial condition, performance and
results may differ materially from the plans, goals, ambitions, outlook,
guidance and expectations set out in the forward-looking statements and other
financial and/or statistical data within this announcement. The Group
undertakes no obligation to update any of the forward-looking statements or
data contained within this announcement or any other forward-looking
statements or data it may make or publish.  Nothing in this announcement
constitutes, nor should it be construed as, a profit forecast or estimate.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCFFFIILFLFLIV