Phoenix Group Holdings PLC (LON:PHNX), the life and pensions book consolidator, said it expects the recent acquisition of ReAssure from SwissRe to substantially boost cash coming into the group.
The FTSE 100-listed firm said it generated cash of £422mln in the half-year to end June, 2020, while its solvency surplus jumped to £4.0bn from £3.1bn.
Including ReAssure, the acquisition of which completed last month, proforma cash generation would have been £1.1bn, the insurer added.
For full-year 2020, the group's cash generation target range has been increased to £1.5 bn-£1.6bn from £800mln-£900mln.
ReAssure cost £3.25bn and added 14mln life policies and £324bn of assets under management.
Phoenix said it expects one of the impacts of coronavirus to be more opportunities for acquisition
“Lower for longer interest rates and volatile equity markets mean insurers will be increasingly focused on freeing up capital by divesting their Heritage books, while corporates will seek to offload balance sheet risk arising from pension schemes.
"In the Open business segment we see our key opportunity to grow through the strong rise of defined contribution pension schemes with market size of £24bn per annum. The £25bn per annum BPA (bulk purchase annuities) market remains buoyant and the short-term dislocation in pricing due to volatile financial markets has had a favourable effect for insurers," the company noted in its results statement.
The interim dividend was unchanged at 23.4p.