Phoenix reveals plans for Standard Life Aberdeen clients

The firm had lost a £109bn asset management mandate for Lloyds' Scottish Widows business earlier this month but a new deal could now be in the works.

It is understood the original deal had fallen apart over competing interests between the insurance businesses of Scottish Widows and Standard Life, which are now void.

Phoenix, meanwhile, has already set its sights on further expansion.

The consolidator already has £240bn of legacy assets and 10.4 million policyholders after today's (23 February) deal but believes it will be able to capitalise further on an impending market split into businesses willing to commit capital to underwrite risks and others looking to generate capital-light fee generating products, such as Standard Life Aberdeen.

"Based on our latest analysis we believe that there remains around £380bn of assets in the UK closed life market, excluding Standard Life Assurance," a spokesman for Phoenix told FTAdviser.

It is estimated the total size of the market, including Germany, Ireland and bulk purchase annuities, amounts to more than £1trn.

But Laith Khalaf, senior analyst at Hargreaves Lansdown, took a more cautious view of impending market moves.

He said: "Looking at big bits of life insurers you could see the Pru (Prudential) possibly looking to offload their book, but not Aviva and L&G.

"Much of the consolidation in the life sector actually took place around 10 years ago and much of it is sitting in what we know as Phoenix today."

The pension market has undoubtedly changed since pension freedoms were announced in April 2014. Annuity sales have suffered a sharp drop, while investment management and on-platform business boomed.

At the same time, workplace pensions experienced an uplift with the introduction of auto-enrolment, which is expected to see a total of £17bn a year going into workplace pensions by 2019 to 2020.

Only this week Lloyds Bank announced major plans to re-enter the space.

But Mr Cunningham believed those moves were geared more towards the direct to consumer space.

He predicted further consolidation in the platform space, however, where he saw "massive" competition among similarly structured players.

He said: “There will be more consolidation amongst platforms, amongst asset managers, and Phoenix are an obvious home for the life stuff, the old style pensions that are not on platforms. I actually think they are pretty good at what they do."