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THE LARGEST UK CONSOLIDATOR OF CLOSED LIFE ASSURANCE FUNDS

Our business manages closed life funds in an efficient and secure manner, protecting and enhancing policyholders' interests whilst maximising value for the Group's shareholders.

As a closed life fund consolidator Phoenix Life focuses on the efficient run-off of existing policies, maximising economies of scale and generating capital efficiencies through operational improvements.


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2018 Trading Update and Capital Markets Day

Phoenix Group announces a strong 2018 year to date trading update, exceeding upper end of two year cash generation target ahead of Capital Markets Day

Phoenix Group, Europe's largest life and pensions consolidator1, announces a strong 2018 year to date trading update on the morning of its Capital Markets Day.

Trading update

· £664 million of cash generation2 in 2018 (2017: £653 million). The Group has delivered £1.3 billion cash generation in 2017 and 2018, exceeding the upper end of its cash generation target of £1.0 billion - £1.2 billion for this period.

· Solvency II surplus of £3.1 billion3 as at 30 September 2018 (£2.5 billion pro-forma as at 31 December 2017). Shareholder Capital Coverage Ratio of 164% as at 30 September 20184 (147% pro-forma as at 31 December 2017).

· Already delivered £400 million of capital synergies on the acquisition of the Standard Life Assurance Limited business against a total £440 million capital synergy target announced for the transaction.

· Assets under administration remain stable at £240 billion as at 30 September 2018 (31 December 2017 proforma: £240 billion) reflecting net business inflows of £3.3 billion by end Q3 on Open business in the UK and Europe.

· Two further bulk purchase annuity transactions completed during the second half taking total 2018 year to date transactions to £0.8 billion.

· Phoenix has selected Diligenta, the FCA regulated subsidiary of TCS, as its partner to deliver a single, digitally enhanced outsourcer platform that will improve customer outcomes and deliver cost savings for our legacy-Phoenix Life policies which is due to be complete by end 2021.

· Fitch Ratings affirmed the Group's ratings in July at A+5; "stable" outlook. Leverage ratio currently 22%6, below the Fitch target range of 25-30%.

Commenting on the results, Group CEO, Clive Bannister said:

"The trading update we have announced today demonstrates Phoenix's strength in delivering and ability to exceed our targets. We have delivered £1.3 billion of cash generation in 2017 and 2018, exceeding the upper end of our target range of £1.0 - £1.2 billion and have significantly strengthened our Solvency II surplus position during the year to a Group surplus of £3.1 billion as at 30 September 2018.

We continue to deliver against our strategy with a further two bulk purchase annuity transactions completed in the second half of the year. Operationally, Diligenta will become our preferred outsource partner and enable us to deliver a single, digitally enhanced outsourcer platform to circa 5.5 million of our customers.

The acquisition of Standard Life Assurance Limited completed on 31 August 2018 and was transformational for Phoenix. I am delighted by the significant progress we have already made with the transition process and the £400 million of capital synergies delivered. I look forward to explaining how Phoenix has been re-defined by this acquisition at today's Capital Markets Day".

Presentation

There will be a presentation for analysts and investors today at 11.00am (BST) at:

Four Seasons Ten Trinity Square, London, EC3N 4AJ

A copy of the presentation will be available at www.thephoenixgroup.com

A replay of the presentation will also be available through the website.