Company Announcements

LEI: 2138001P49OLAEU33T68

Phoenix Group delivers another year of strong organic new business growth in 2023 and achieves its 2025 growth target two years early

·   2023 new business net fund flows of c.£7bn, a c.80% year-on-year increase

·   Workplace net fund flows of c.£4.5bn have nearly doubled year-on-year with c.£2bn of new scheme assets transferred in 2023, including the transfer of one of the largest workplace schemes tendered in the UK market in recent years

·   BPA premiums of c.£6bn written in 2023 (FY22: £4.8bn), with a reduced capital strain of <5%

·   The Group has therefore delivered c.£1.5bn of new business long-term cash generation in 2023, achieving its 2025 target two years early

Commenting on the trading update, Phoenix Group CEO, Andy Briggs said:

"I am delighted that Phoenix Group has delivered another year of strong organic growth in 2023, with increased new business net fund flows supporting us in delivering £1.5bn of new business long-term cash. This means we have achieved our 2025 new business long-term cash target two years early, reflecting the focus and investment we have put into our growth strategy. Our capital-light fee-based Workplace business continues to go from strength to strength, nearly doubling its net fund flows year-on-year, including the transfer of one of the largest workplace schemes tendered in the UK market in recent years. Our BPA business also performed well in a buoyant market, with c.£6bn of premiums contracted at a reduced capital strain of less than 5%."

Phoenix Group Holdings plc ("Phoenix Group" or "the Group") today announces that it has delivered strong organic growth in 2023, with new business net fund flows of c.£7 billion (FY22: £3.9 billion). This was underpinned by improved performance in the Standard Life branded Pension & Savings and Retirement Solutions businesses, and is in line with the Group's strategy to deliver a balanced business mix through leveraging its scale in the capital-light fee-based businesses and maintaining a disciplined level of growth in annuities.

Within Pensions & Savings, the Workplace business delivered net fund flows of c.£4.5 billion in 2023, nearly double the prior year (FY22: £2.4 billion), supported by c.£2 billion of new scheme assets transferred in the period. This included the transfer of the Siemens workplace scheme, one of the largest workplace scheme transfers to have been tendered in the UK market in recent years, which demonstrates the strength of our proposition.

Growth in the Retirement Solutions business has been driven by our Bulk Purchase Annuities ("BPA") business, which completed an additional 7 BPA transactions during the second half of 2023 covering c.£2.8 billion of premiums. The Group has therefore contracted c.£6 billion of premiums during the year (FY22: £4.8 billion). The capital invested for 2023 is expected to be slightly less than £300 million, equating to a reduced capital strain of <5% (FY22: 5.8%).

As a result of this strong performance, the Group has delivered c.£1.5 billion of total new business long-term cash generation in 2023, achieving its 2025 target two years early. This outperformance reflects the Group's clear strategic focus and investment into growth, which has been further accelerated by a supportive economic environment.

Total Group net outflows, including the legacy Heritage business, have nearly halved in 2023 to c.£(3) billion (FY22: £(5.7) billion).

In line with the guidance provided at our 2023 Half Year results, the Group continues to expect its Solvency II Surplus to be slightly below the 30 June position of £3.9 billion. This reflects the continued investment we are making into our business, which is supporting the strong growth we have reported today.

Phoenix Group will announce its Full Year 2023 results on 22 March 2024.

Enquiries

Investors/analysts:

Claire Hawkins, Director of Corporate Affairs and Investor Relations, Phoenix Group

+44 (0)20 4559 3161

Andrew Downey, Investor Relations Director, Phoenix Group

+44 (0)20 4559 3145

Media:

Douglas Campbell, Teneo

+44 (0)7753 136 628

Shellie Wells, Corporate Communications Director, Phoenix Group

+44 (0)20 4559 3031

Legal Disclaimers

This announcement in relation to Phoenix Group Holdings plc and its subsidiaries (the 'Group') contains, and the Group may make other statements (verbal or otherwise) containing, forward-looking statements and other financial and/or statistical data about the Group's current plans, goals, ambitions, outlook, guidance and expectations relating to future financial condition, performance, results, strategy and/or objectives.

Statements containing the words: 'believes', 'intends', 'will', 'may', 'should', 'expects', 'plans', 'aims', 'seeks', 'targets', 'continues' and 'anticipates' or other words of similar meaning are forward looking.  Such forward-looking statements and other financial and/or statistical data involve risk and uncertainty because they relate to future events and circumstances that are beyond the Group's control. For example, certain insurance risk disclosures are dependent on the Group's choices about assumptions and models, which by their nature are estimates. As such, actual future gains and losses could differ materially from those that the Group has estimated.

Other factors which could cause actual results to differ materially from those estimated by forward-looking statements include, but are not limited to: domestic and global economic, political, social, environmental and business conditions; asset prices; market related risks such as fluctuations in investment yields, interest rates and exchange rates, the potential for a sustained low-interest rate or high-interest rate, environment, and the performance of financial or credit markets generally; the policies and actions of governmental and/or regulatory authorities, including, for example, initiatives related to the financial crisis, the COVID-19 pandemic, climate change and the effect of the UK's version of the "Solvency II" regulations on the Group's capital maintenance requirements; the impact of changing inflation rates (including high inflation) and/or deflation; the medium and long-term political, legal, social and economic effects of the COVID-19 pandemic and the UK's exit from the European Union; the direct and indirect consequences of the European and global macroeconomic conditions of the Russia-Ukraine War and related or other geopolitical conflicts; information technology or data security breaches (including the Group being subject to cyberattacks); the development of standards and interpretations including evolving practices in ESG and climate reporting with regard to the interpretation and application of accounting; the limitation of climate scenario analysis and the models that analyse them; lack of transparency and comparability of climate-related forward-looking methodologies; climate change and a transition to a low-carbon economy (including the risk that the Group may not achieve its targets); market competition; changes in assumptions in pricing and reserving for insurance business (particularly with regard to mortality and morbidity trends, gender pricing and lapse rates); the timing, impact and other uncertainties of proposed or future acquisitions, disposals or combinations within relevant industries; risks associated with arrangements with third parties; inability of reinsurers to meet obligations or unavailability of reinsurance coverage; the impact of changes in capital, and implementing changes in IFRS 17 or any other regulatory solvency and/or accounting standards, and tax and other legislation and regulations in the jurisdictions in which members of the Group operate.

As a result, the Group's actual future financial condition, performance and results may differ materially from the plans, goals, ambitions, outlook, guidance and expectations set out in the forward-looking statements and other financial and/or statistical data within this announcement. The Group undertakes no obligation to update any of the forward-looking statements or data contained within this announcement or any other forward-looking statements or data it may make or publish.  Nothing in this announcement constitutes, nor should it be construed as, a profit forecast or estimate.