Phoenix Group profits jump on pre-Brexit pension gains

Insurer Phoenix Group has reported a jump in profits as its pension business benefited from UK companies rushing to offload risk ahead of Brexit.

The FTSE 100 firm’s operating profits for the year to December increased by 14.4% to £810 million.

It has seen client numbers increase as UK companies sought to offload pension obligations from their balance sheets to improve their financial flexibility.

Phoenix said it generated £707 million in cash in 2019, surpassing its predicted range of between £600 million and £700 million for the year.

The company has 10 million policy holders and around £245 billion in assets under administration with operations in UK, Ireland and Germany.

The business is set to expand further with the £3.2 billion acquisition of Swiss Re’s life assurance business ReAssure, in a deal which was agreed in December. It said it expects to close the deal in mid-2020.

Phoenix also announced that Jim McConville, the company’s group finance director and group director for Scotland, will step down from the company on May 15 after eight years with the business.

His departure will be part of a major leadership shake-up at the company, with current chief Clive Bannister retiring later this month.

Mr Bannister has spearheaded the company’s rapid growth in recent years and will be replaced in the top role by Andy Briggs, the former head of Friends Life and Aviva UK.

Mr Bannister said: “Phoenix has had a strong year – we beat our cash generation target, made significant progress in the transition of Standard Life Assurance and announced the £3.2 billion acquisition of ReAssure.

“I am extremely proud of the evolution of Phoenix during my time as CEO and I would like to thank all of the colleagues I have worked with throughout to deliver benefits to both our customers and shareholders.”

Phoenix chairman Nicholas Lyons said: “I am delighted to welcome Andy Briggs to the group as Clive’s successor as CEO and to announce today that Rakesh Thakrar will succeed Jim McConville as group finance director when he retires in May.

“Andy and Rakesh inherit a group that is delivering on its financial and operational targets and is strategically positioned to capture future opportunities in the life and pensions industry.”