Phoenix Group is looking to snag its next takeover deal as more “break-ups” are rumoured to take place in the insurance sector.
Andy Briggs, chief executive officer of Phoenix, told This is Money that the UK market has around £480 billion of closed-book assets – insurance policies that are no longer for sale but are still being paid for their premiums – that are “split around a number of different players.”
As an example of a potential break-up, the publication pointed to the arrival of a new chief executive at M&G, which it suggested could make or break the underperforming FTSE 100 savings and investment group, based on whether the asset management arm is separated from the savings and retail side of the business. It is a consideration deemed necessary by critics like Andrew Crean who believe M&G could “get [more] value from its different parts”.
Briggs told This is Money that the speculated break-ups in the insurance sector would allow Phoenix to pursue more acquisitions in the future, on top of its recent headlining deal to swoop in for Sun Life UK for £248 million in cash earlier this month.
Read more: Phoenix swoops for Sun Life UK
The statements come on the heels of Phoenix’s release of its financial results for the six months to June 30. The group saw a record cash generation of £950 million in H1 FY22, up from £872 million in H1 FY21. Long-term cash generation also more than doubled from £206 million to £430 million.
Phoenix’s H1 FY22 success could be why it continues to specialise in these closed-book assets as other insurers begin surrendering theirs given how expensive they are to maintain over time.
