(Reuters) - Phoenix Group Holdings, Britain’s largest owner of life assurance funds closed to new customers, is not counting on acquisitions to help it meet the financial targets it has set for the next five years, Chief Executive Clive Bannister said.
Phoenix Group unveiled a cash flow target of 2 billion pounds for 2016-2020 on Wednesday, factoring in the maturity of a revised bank facility.
“For the company to meet its financial obligations, we do not have to do a deal, but we are highly motivated to do a deal ...,” Bannister told Reuters.
The company said in August it was on track to achieve a cash-generation target of 2.8 billion pounds in 2014-2019.
The insurer also set a 2016 cash generation target of 400 million–450 million pounds, compared with $225 million pounds achieved in 2015.
With most insurers having settled into new European capital rules, Bannister said further consolidation in Britain was likely and that Phoenix, being dedicated exclusively to the run-off and administration of closed life books, would play a role.
However, he declined to comment on whether Phoenix was interested in Abbey Life, the UK insurance unit of Deutsche Bank AG. Sky News reported on March 17 that Phoenix was preparing a bid for Abbey Life.
People familiar with the situation told Reuters last year that Germany's biggest bank was weighing the possible sale of Abbey. (reut.rs/1QnFLoH)
Phoenix Group lost out last year on buying Guardian Financial Services, which was bought by reinsurer Swiss Re AG for about 1.6 billion pounds..
Asked whether Phoenix would look at buying smaller assets, Bannister said size was less important than potential.
“I think it was Naomi Campbell who said she wouldn’t be a model for less than x amount of money,” Bannister said. “I think there’s a point at less than a 100 million pounds of embedded value where I do not think (an acquisition) makes sense for us.”
At 1026 GMT, Phoenix’s shares were up 2.6 percent at 942 pence on the London Stock Exchange.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier and Ted Kerr