24th Apr 2015 06:59
LONDON (Alliance News) - Phoenix Group Holdings Friday said it is on track to meet its financial targets over the short and medium term, as the company reported a fall in first-quarter cash generation.
Phoenix reported cash generation of GBP87 million in the three months ended March 31, compared with GBP235 million in the corresponding period of the prior year.
Total holding company cash amounted to GBP1.03 billion at the end of March, up from GBP988 million at the end of 2014.
"Phoenix Group remains well placed in a changing regulatory environment. We are on track for both our Solvency II Internal Model Application and to achieve an investment grade credit rating during 2015," Clive Bannister, chief executive, said in a statement.
Phoenix is aiming to generate GBP200 million to GBP250 million in cash in 2015 as its life companies retain capital in the short term due to uncertainty over the Solvency II regulations on capital for insurers across Europe. The group reported GBP567 million of cash generation in 2014. The group wants to generate GBP2.8 billion of cash between 2014 and 2019, and is targeting cumulative incremental Market Consistent Embedded Value enhancements of GBP400 million between 2014 and 2016.
The group, which acquires and manages closed life and pension funds, said it has continued talks with credit rating agencies and still expects to complete the process for an investment grade credit rating later this year, having undertaken a series of measures over the past two years or so in order to reduce complexity and borrowings.
Following a GBP250 million equity fundraising and re-terming of its bank debt in January 2013, Phoenix went on to sell Ignis Asset Management to Standard Life for GBP390 million and refinance its debt in 2014, allowing it to pursue the investment grade credit rating and to consider growth by merger and acquisition.
In addition, Phoenix said it has agreed a wider partnership with annuities provider Just Retirement PLC to give more options to its customers amid new pension freedoms recently introduced by the UK government.
According to Phoenix, the expanded partnership will enable customers to "shop around" for standard and enhanced annuities as well as offering a drawdown pension product. Customers will also be given access to financial advice to help them prepare for retirement.
"We have successfully managed the introduction of the new pension freedoms, supporting our customers as they consider a wider range of options for their retirement provision," Bannister said.
By Samuel Agini; [email protected]; @samuelagini
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