Phoenix Group Holdings plc (“Phoenix Group” or “the Group”) today announces that it completed four Bulk Purchase Annuity (BPA) transactions during the second half of 2021 covering £4.0 billion of premiums, comprising £3.6 billion of external deals and a further £0.4 billion tranche of the Group’s Pearl Pension Scheme.
This equates to total BPA premiums of £5.5 billion contracted for the year (FY20: £2.5 billion). The capital strain for all BPA transactions written in 2021 is currently expected to be c.6.5% (FY20: 9%) and the cash multiple c.2.6x (FY20: 2.3x), with the second half transaction economics reflective of the current low credit spread environment.
This strong performance highlights Phoenix’s success in driving organic growth, and reflects the investment the Group is making into both its Open business and internal asset management function. Phoenix is building a market-leading BPA team and asset sourcing capability, which supports a comprehensive BPA solutions offering that is now distributed to the market under the Standard Life brand.
As a result, Phoenix Group now expects to deliver in excess of £1 billion of total new business long-term cash generation for 2021, which will more than offset the run-off of the in-force business (currently c.£0.8 billion of annual cash generation).
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