(Recasts, adds CEO comments)
By Muvija M
Dec 3 (Reuters) - Phoenix Group expects more
companies to offload defined benefit pension obligations as a
result of the economic and business impact of the COVID-19
pandemic.
As a specialist in buying and managing books of life
insurance business closed to new customers, Phoenix has
benefited from a flurry of such bulk annuity deals.
"I am yet to meet the finance director of any type of
business that is pleased to have a large pension scheme attached
to the side," its chief executive Andy Briggs told Reuters.
"As we go through this awful pandemic, the desire of finance
directors to offload these pension schemes and focus on their
core business is greater than ever," Briggs added on Thursday.
Corporate pension risk is in the spotlight after British
tycoon Philip Green's Arcadia fashion group collapsed into
administration, putting over 13,000 jobs at risk and raising
concerns over payments to pension scheme members.
Phoenix said it had generated 1.7 billion pounds ($2.28
billion) in cash this year, more than double last year and
exceeding its own revised estimates.
Panmure analyst Ming Zhu called the update from Phoenix,
which bought the British ReAssure business of Swiss Re
earlier this year, "very impressive" given the current market
environment.
The number is higher than the reported cash generation of
707 million pounds for 2019 and a raised 2020 target range of
1.5-1.6 billion pounds provided by Phoenix in August.
Phoenix's trading update comes a week after it said it was
assessing a range of strategic options for its European
businesses after recent third-party expressions of interest.
One media report put the sale value of Phoenix's business in
Ireland and Germany at up to 650 million euros.
The insurer, which has nearly 14 million policies and 324
billion pounds of assets under administration, said its Solvency
II surplus was 5 billion pounds at the end of September, up from
4.4 billion pounds in June as a result of tight cost controls.
($1 = 0.7461 pounds)
(Reporting by Pushkala Aripaka and Muvija M. in Bengaluru,
Carolyn Cohn in London; Editing by Rashmi Aich and Alexander
Smith)