Profits at closed-book provider Phoenix Life fells 33 per cent in 2015, its full-year results show.
In 2014 the firm made an operating profit of £483m but this dropped to £324m in 2015.
Phoenix blames the decrease on the impact of the sale of its asset management business Ignis in April 2014, as well as the “lower impact of management actions compared to the previous period”.
Cash generation also fell year-on-year, from £567m to £225m, which the firm says is as result of having to retain extra capital to comply with Solvency II.
Earlier this month the FCA published its closed-book review and revealed six firms, not including Phoenix, had been referred for enforcement.
Phoenix says: “As the UK’s largest specialist closed life fund consolidator, we welcome the focus the review brings to the fair treatment of policyholders. Our customers and the outcomes of their policies are fundamental to our business model.”
Also in March Money Marketing revealed several providers’ plans to cap exit fees, however Phoenix claimed there is “no evidence” penalties are blocking customers’ access to the pension freedoms.
Today’s report also reveals over 80 per cent its polices have no exit fees. Phoenix estimates exit charges total £22m for its customers over the age of 55.
Phoenix has around 4.5 million customers and £47bn of assets.
The provider is also said to be in talks with fellow closed-book firm Abbey Life over a possible takeover.
Chairman Henry Staunton says: “There will be further consolidation in the UK life sector as existing providers struggle with issues such as heightened regulatory scrutiny, increased capital requirements and shortages of skilled personnel to manage complex legacy products.
“Phoenix Group has the expertise and operating model in place to take advantage of this changing environment and I look forward to the Group examining further opportunities to grow the business.”
Source: Money Marketing