Phoenix Group made a further £590mn from Standard Life last year, taking the total value generated from this deal over £1.6bn.
In its annual financial results published today (March 14), the retirement business said this was £400mn more than the revised target it set post-acquisition.
Phoenix bought the Standard Life brand name in May 2021 after it bought Standard Life Aberdeen’s insurance arm in 2018 for £3.28bn.
Elsewhere in its results, Phoenix said it has made the strategic decision to “re-phase” the remaining legacy Standard Life migrations, meaning they will now complete by 2025.
During 2019, Standard Life said it planned to migrate all its administration, customer operations and digital applications to TCS - Phoenix’s IT services provider - by 2022.
Meanwhile, ReAssure - which Phoenix bought in July 2020 - delivered £234mn in 2021, bringing the total value generated by this deal so far to £930mn, coming in short of a £1bn revised target.
Having realised £2.5bn of value from deals so far, Phoenix has its eyes on further mergers and acquisitions, having hired JPMorgan Chase’s Anna Franekov to lead the growth.
In its results, the firm said it had “a clear ambition to execute value-accretive M&A with significant opportunities within the £480bn heritage market”.
Assets under administration and operating profit both increased incrementally last year, to £310bn and £1.23mn respectively. In 2020, these totals stood at £307bn and £1.199mn.
The firm said its Retirement Solutions business was the largest contributor in 2021 to new business long-term cash generation, which climbed 55 per cent compared to 2020.
“This reflects the significant investment we have made into our open business and asset management capabilities, as well as the acquisition of the Standard Life brand which the majority of our open business now operates under,” the firm said.
Retirement Solutions generated £950mn of the £1.2bn in new business long-term cash generation, having contracted £5.6bn of bulk purchase annuity premiums in the year - more than double the £2.5bn of premiums they generated in 2020.
The board has also announced Phoenix Group's new dividend policy, which now "intends to pay a dividend that is sustainable and grows over time". This saw the firm announce an inaugural dividend increase of 3 per cent for 2021.
"It has been an outstanding year for Phoenix, with a record set of financial results and significant strategic progress made as we fully embraced our purpose,” said Andy Briggs, Phoenix Group’s chief executive.
“2021 marked a pivotal moment for Phoenix, with £1.2bn of new business from our open business more than offsetting the run-off of our heritage business for the first time.
“This demonstrates that Phoenix is a growing, sustainable business, and enabled the board to recommend our first ever organic dividend increase of 3 per cent.”