Phoenix Group set to hit all of its 2012 financial targets

published 31 October 2012

Phoenix Group, the consolidator of closed life assurance funds, is on track to meet all of its 2012 financial targets after a solid third quarter.

The group generated £299m of cash in the first nine months of 2012, with a further £218m generated in October, primarily from its life assurance companies.

The estimated Insurance Group Directive (IGD) surplus - a Financial Services Authority (FSA) regulatory measure which calculates surplus capital within the group - increased by £0.2bn during the third quarter to £1.4bn, while IGD headroom also increased by £0.2bn, to £0.6bn.

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The Phoenix Life Holdings Limited (PLHL) individual capital assessment (ICA), which assesses the capital resources and requirements arising from the obligations and risks which exist outside the life companies, increased to an estimated £614m at the end of September from £500m at the end of June. As agreed with the FSA, the group aims to ensure that PLHL maintains an ICA surplus of at least £150m.

Phoenix Life now comprises three UK life companies: Phoenix Life Limited; Phoenix Life Assurance Limited (formerly Pearl Assurance Limited); National Provident Life Limited.

The estimated Phoenix Life free surplus, which represents excess capital over the FSA minimum requirements and the life companies' capital policies, improved to £692m at the end of September from £566m at the end of June.

The group enjoyed £2.9bn of net third party asset inflows generated by Ignis, the asset management arm of the group, in the first nine months of 2012, including £1.5bn of assets relating to the annuity transfer transaction with Guardian announced in June, which were subsequently transferred back to Ignis for investment management.

Total group assets under management at the end of September had fallen to £67.9bn from £71.6bn at the end of June. The decrease since the end of June was largely down to the transitional arrangement referred to above of the group's £5bn annuity transfer transaction to Guardian.

The group said a total of 3m policies have now been migrated onto the new policy administration system, BaNCS. The remaining 180,000 policies which are moving onto the new system are expected to be transferred during the first quarter of 2013.

"We are on track to meet all of our financial targets for the full year and remain confident of achieving a re-terming with our banks in due course," said Clive Bannister, Group Chief Executive of Phoenix.