AXA has continued to shed more business after agreeing to sell its Wealth and SunLife pensions and protection businesses to Phoenix Group. This comes just one month after the group sold its Elevate platform to Standard Life.
Phoenix will pay consideration of £375m in cash payable on completion and will acquire £12.3bn of assets under management with more than 910,000 policies. This will generate anticipated cashflows of approximately £300m pa between 2016 and 2020 and £200m thereafter, which will boost anticipated cash revenues to £2.3bn per annum.
In June, AXA sold its Elevate platform to enable concentration on its specialist investment house, Architas, which will be deployed across its European life and savings businesses. AXA has more than trebled funds under management from £15bn to more than £46bn over the past five years.
Scott Gallacher, chartered financial planner at Leicester advisers Rowley Turton, explained responsibility for this high activity may lie with advisers.
“This seems to be a long-running theme within the UK insurance industry. Perhaps partly the fault of IFAs who have driven down costs to such an extent that business might not be as profitable it was previously, meaning firms that do not develop strong niches might struggle.”
Phoenix Group is no stranger to acquiring polices from other firms, particularly in its retirement business. Since 2006 it has transferred policies from providers such as Alba Life, Britannic, London Life and National Provident. Before this proposed acquisition, the group looked after an estimated 4.5m policies and administered more than £47bn assets under management.
Phoenix Group’s chief executive, Clive Bannister, said the acquisition “represents another important step forward” in its growth strategy. He also anticipates there will be further consolidation in the industry, which Phoenix will continue to be active in.
craig.rickman@ft.com
