What we do
Phoenix Group is the largest specialist consolidator of heritage life assurance funds in Europe.
Our Heritage business comprises two thirds of our assets under management and contains businesses which no longer actively sell new life or pension policies and which run-off gradually over time.
On the Open side of our business we write new life insurance policies and also manufacture products in areas such as workplace pensions and SIPPs for distribution through our strategic partnership with Standard Life Aberdeen.
Across all our operations we have 10 million policyholders and total assets under administration of £245 billion.
Our primary focus remains growth through closed life consolidation but new business generated across both our Heritage and Open business will dampen the run off of our in-force policies and extend the duration of our business.
Our mission is to improve returns for our customers and deliver value for shareholders.
We intend to achieve this by realising our vision to be Europe’s Leading Life Consolidator and delivering the safe, innovative and profitable management of our customers' funds.
How we create value
In our Heritage business we are not required to allocate significant capital to support the writing and distribution of new insurance products. This means that the capital requirements of our operating life companies decline as policies mature, releasing excess capital in the form of cash.
We create value by seeking to enhance customer returns from our book of closed life funds and generating profits for shareholders from participation in investment returns, policyholder charges and management fees earned on assets.
In our Open business we have a strategic partnership with Standard Life Aberdeen plc, which brings together two businesses with complementary skill sets. Phoenix will manufacture capital light products in areas such as workplace pensions and SIPPs and Standard Life will market and distribute the products.
We also have a range of new business opportunities in Ireland and Germany and write over 50s life insurance plans that are sold by our distribution company, SunLife.
External outsource partners are used selectively for policy administration, thereby minimising fixed costs, providing a more efficient operating model as the policies run-off, in addition to a scalable and cost-effective platform to support the Group’s consolidation strategy.
Across all our operations, we are focused on cash generation and providing our shareholders with a stable and sustainable dividend. Growth through consolidation and new business written across both our Heritage and Open business units extend the duration of our business and enhances the sustainability of the dividend.
Please click here to download our fact sheet.
Our investment thesis:
1. Predictable long term cash generation supporting a stable, sustainable dividend
As the majority of the Group’s funds are closed to new business, we have high visibility of our cash flows over the long term. Phoenix sets short and medium term targets and guides to long term cash generation which support the Board's policy of maintaining a stable, sustainable dividend while the Group builds its financial flexibility to continue to execute its growth strategy.
The Group’s medium-term target is to deliver £3.8 billion of cash over the period 2019 to 2023.
The combined group has guided to long-term cash generation of £8.2 billion in the period beyond 2023.
2. An operational platform specifically designed for our markets
Phoenix Group is the largest specialist consolidator of heritage life funds in Europe, with a simplified and scalable business model. Our size means we achieve economies of scale, diversification benefits and have the ability to save costs both internally and through outsourcing arrangements.
3. Management track record of delivering incremental value
Phoenix has a track record of delivering incremental value through 'management actions' which characterise an approach for the efficient and effective structuring, integration and management of all our funds and the investments they hold.
4. Growth through further closed life consolidation
We believe the insurance industry is bifurcating and splitting into 'capital heavy' insurance specialists who will continue to underwrite and administer insurance products and 'capital light' firms who will concentrate on sales and distribution.
Phoenix's vision is to be Europe’s Leading Life Consolidator in this bifurcation which we estimate has a market size of circa £580 billion across the UK, Germany and Ireland.
5. Growth through new business
Phoenix has a range of new business opportunities across its Heritage and Open business which will dampen the run-off of our in-force business. Integral to this is our strategic partnership with Standard Life Aberdeen plc under which Phoenix will underwrite and administer policies that Standard Life Aberdeen distribute and sell.
We will also generate new business through vesting annuities, our businesses in Germany and Ireland, Sun Life and through Bulk Purchase Annuity transactions.