Carlton James Newsfeed
  • Loading stock data...

British insurer Phoenix to amass up to $2.8 billion for M&A

Mar 8, 2021

By Carolyn Cohn

LONDON (Reuters) – Fast-expanding British insurer Phoenix could have up to two billion pounds ($2.8 billion) to spend on acquisitions by the end of 2021, its chief executive forecast.

Phoenix, which reported a 48% rise in 2020 operating profit on Monday, has grown rapidly through acquisition, moving beyond life policies which are closed to new customers.

“We would expect to have 1-2 billion pounds at the end of this year that we could use for M&A,” chief executive Andy Briggs told Reuters, adding that Phoenix was not “pounding the streets” looking, after making two large acquisitions.

Phoenix bought Swiss Re’s British business ReAssure in 2020, after its 2018 acquisition of Standard Life Aberdeen’s European and British insurance business.

Phoenix had specialised in closed life insurance books but the Standard Life deal propels it into the open book market.

The two firms agreed last month that Phoenix would buy the Standard Life brand, while Standard Life Aberdeen will buy back some savings products from Phoenix.

Phoenix’s shares hit a three-month high and were up 2.3% at 7.44 pounds at 0903 GMT, among the FTSE 100 top gainers.

In November, Phoenix said it was assessing a range of strategic options for its European businesses after expressions of interest from third parties.

The businesses were still under review, Briggs said.

Briggs also said Phoenix was considering entering the market for equity release mortgages, popular among other life insurers, which enable homeowners to borrow against the value of their property, a loan which is paid back when they die.

Phoenix’s operating profit of 1.2 billion pounds came in above consensus forecasts and the company also raised its 2021-2023 cash generation target by 200 million pounds to 4.4 billion, helped by new business.

Phoenix said it would pay a final dividend of 24.1 pence per share, 3% above its interim dividend.

($1 = 0.7231 pounds)

(Additional reporting by Muvija M in Bengaluru; Editing by Simon Jessop, Rachel Armstrong and Alexander Smith)