Phoenix Group Holdings PLC (LSE:PHNX) increased its dividend by 3% and said it expects its cash balance to be at the top end of its target range this year after sales of bulk annuities soared in the first half.
The insurer locked in £1.6bn of contracted premiums in the six months to 30 June 2022 from bulk annuities, used by pension schemes to secure future pay-outs, a 280% year-on-year increase, according to its interim results statement.
It had £950mln of cash at the end of the interim period, up from £872mln a year ago, and a surplus under the Solvency II requirements of £4.7bn.
It said it now expects to deliver cash generation at the top end of its £1.3bn-£1.4bn target range for 2022.
Chief executive Andy Briggs said: “We have been working tirelessly to ensure we can support our customers and colleagues impacted by the increased cost of living—building on our programme of activities for our most."
The insurer put up its interim dividend by 3% to 24.8p per share, the same amount as its final dividend last year.
Briggs further proposed to increase the final dividend by 2.5% at the end of this year to reflect the value the insurer expects to gain from its purchase of Sun Life of Canada UK.
He said the company has delivered “organic growth, with £430mln of new business from our open business, and inorganic growth, with the announcement of our £248mln acquisition of Sun Life of Canada UK".
The long-term savings and pensions provider said it is “confident about the outlook” for growth despite the “uncertain economic backdrop”, and will target opportunities in M&A, bulk annuities and workplace and individual pensions and savings in the UK market.