Receive free UK insurance coverage business updates
We’ll ship you a myFT Daily Digest electronic mail rounding up the newest UK insurance coverage business information each morning.
High inflation has supplied a boost to the UK’s retirement sector, as rising pay awards enhance the quantity that persons are placing into their pension, in accordance to FTSE 100 life insurance coverage group Phoenix.
Official knowledge final week confirmed UK wages grew at 7.8 per cent — the quickest tempo on report — within the three months to July as staff reacted to will increase in the price of residing by negotiating greater pay will increase with their employers. Because many office retirement schemes are straight linked to salaries, any enhance in pay leads to greater pension contributions.
“Counter-intuitively, as far as our sector is concerned, the UK economic environment is accelerating our growth, so we really are feeling positive about the market drivers of growth,” stated Phoenix’s chief government Andy Briggs in an interview with the Financial Times.
Briggs additionally pointed to a booming marketplace for bulk buy annuities, by which corporations switch their outlined profit pension schemes to insurers comparable to Phoenix, spurred by rising rates of interest.
Higher rates of interest cut back the current worth of the schemes’ future liabilities, and so make pension switch offers extra inexpensive for corporations. According to consultants Lane Clark & Peacock, there was a report quantity of offers within the first half of the yr.
Briggs was additionally optimistic in regards to the prospect of extra mergers and acquisitions exercise. Much of Phoenix’s development traditionally has come from acquisitions, including closed books of life insurance enterprise to its personal operations. In the primary half of the yr, the corporate accomplished the £250mn acquisition of Sun Life of Canada UK, and Briggs expects extra offers as inflation provides to life insurers’ prices.
His feedback got here as Phoenix reported abridged outcomes for the primary half of the yr. New enterprise internet fund flows, a measure of the quantity of latest cash that the corporate was given to handle, rose 72 per cent to £3.1bn.
Overall, Phoenix’s working companies generated £898mn of money. That was down on the £950mn delivered in the identical interval final yr, however the firm stated the determine for the total yr can be on the high finish of its goal vary of £1.3bn to £1.4bn.
The first-half dividend was elevated by 5 per cent to 26p per share.
Phoenix has delayed the publication of a full set of accounts for the primary half of the yr till subsequent week, blaming the “operational complexity” of the transition to the brand new IFRS 17 accounting customary.
Phoenix shares rose by slightly below 1 per cent in early buying and selling on Monday.
