Standard Life Plc · LSE:SDLF
Standard Life — Phoenix Group Holdings — FY2022 Earnings Presentation
19 slides from Standard Life's earnings presentation, Sep 28, 2023
Slide 1: IFRS 17 results
IFRS 17 results Phoenix Group Holdings plc 28 September 2023
Slide 2: IFRS 17 transition update
a1 Phoenix IFRS 17 transition update
Slide 3: IFRS 17 has no impact on our strategy or dividend
IFRS 17 has no impact on our strategy or dividend No change to No impact on our We remain focused on our clear strategy sustainable dividend delivering cash and capital Our strategy of growing our in-force The long-term sustainability of our We will continue to focus on the delivery business over ti
Slide 4: Key takeaways of Phoenix's transition to IFRS 17
Key takeaways of Phoenix’s transition to IFRS 17 As a result of our successful track record of value-accretive M&A, c.95% of our business was recognised at fair value on 1 transition, which results in the establishment of a lower CSM and increases the volatility in our shareholders’ equity IFRS 17 F
Slide 5: Around half of our policyholder liabilities are affected by the application of IFRS 17
Around half of our policyholder liabilities are affected by the application of IFRS 17, with c.95% of IFRS 17 business fair valued on transition Around half of our business is not • All of our With-Profits and annuity business is captured under IFRS 17 impacted by IFRS 17 IFRS 17 adoption • Unit-Lin
Slide 6: Impact of IFRS 17 on Annuities business
Impact of IFRS 17 on Annuities business Annuities business fully captured under IFRS 17 Illustrative change in the CSM • Fully retrospective transition approach used for BPAs • Other annuities fair valued on transition (or on acquisition for ReAssure) Transition • IFRS 17 slows down the recognition
Slide 7: Impact of IFRS 17 on With-Profits and Unit-Linked hybrid business
Impact of IFRS 17 on With-Profits and Unit-Linked hybrid business With-Profits business and Unit-Linked hybrids are fully captured under IFRS 17 • Historic acquisitions and integrations means fair value transition approach used due to data availability • Profits now spread over life of product – res
Slide 8: There was a broadly neutral impact on shareholders' equity on transition in 2021
There was a broadly neutral impact on shareholders’ equity on transition in 2021 FY 2021 • Acquisitive nature of our business model means c.95% of IFRS 17 business is fair valued on transition Adjusted shareholders’ equity • Decrease in equity from Annuities, as the previous Day-1 profit recognition
Slide 9: 2022 adjusted shareholders' equity (including the CSM) is higher than IFRS 4 shareholders' equity
2022 adjusted shareholders’ equity (including the CSM) is higher than IFRS 4 shareholders’ equity Transition of adjusted shareholders’ equity from IFRS 4 to IFRS 17 Key messages +24% • Lower IFRS 17 shareholders’ equity compared to £5.2bn IFRS 4 due to: o 1 Reduction in adjusted operating profit due
Slide 10: Key changes to adjusted shareholders' equity on transition to IFRS 17 at FY 2022
Key changes to adjusted shareholders’ equity on transition to IFRS 17 at FY 2022 Transition of adjusted shareholders’ equity from IFRS 4 to IFRS 17 £2.2bn £1.5bn £2.0bn £5.2bn £4.2bn £(2.6)bn £(0.6)bn £0.4bn £3.2bn £3.2bn store of future value £(1.9)bn FY22 IFRS 4 Move to IFRS 17 Recognise Transfer
Slide 11: 2022 restated adjusted operating profit is c.£0.6 billion lower under IFRS 17
2022 restated adjusted operating profit is c.£0.6 billion lower under IFRS 17 Transition of adjusted operating profit before tax from IFRS 4 to IFRS 17 £1.2bn £(0.2)bn £(0.2)bn £0.2bn £0.6bn £(0.2)bn Transfer to the CSM £(0.1)bn £(0.1)bn FY22 IFRS 4 Deferral of annuity Model, methodology Items not W
Slide 12: Increased accounting volatility under IFRS 17
Increased accounting volatility under IFRS 17 2022 IFRS 4 IFRS 17 Change Key messages on restatement Adjusted operating profit before tax £1,245m £570m £(675)m • Increased investment return variances and economic assumption changes due to increased Investment return variances and economic assumption
Slide 13: 7% growth in the Group CSM during 2022, driven by new business
7% growth in the Group CSM during 2022, driven by new business Movement of the CSM from 1 January 2022 to 31 December 2022 Key messages Total CSM (gross) £2.4bn • Total CSM (gross of tax) of £2.6bn grew 7% year on year as at FY21 (FY21: £2.4bn) New business £0.2bn • New business profit largely drive
Slide 14: Decrease in adjusted shareholders' equity in 2022 largely driven by economics
Decrease in adjusted shareholders’ equity in 2022 largely driven by economics due to increased accounting volatility under IFRS 17 Movement of IFRS 17 adjusted shareholders’ equity over 2022 Key messages £7.6bn • Loss for the year primarily driven by adverse investment return variances £0.6bn • This
Slide 15: Half year 2023 IFRS 17 results
Half year 2023 IFRS 17 results
Slide 16: Our adjusted operating profit has increased by 5% year-on-year
Our adjusted operating profit has increased by 5% year-on-year primarily due to a higher CSM release HY22† HY23 Key messages Heritage £114m £117m • Heritage adjusted operating profit broadly consistent year- on-year Open £171m £182m • Open adjusted operating profit increased year-on-year due Corpora
Slide 17: 5% growth in the Group CSM in H1, driven by new business and the Sun Life of Canada UK acquisition
5% growth in the Group CSM in H1, driven by new business and the Sun Life of Canada UK acquisition Movement of the CSM from 1 January 2023 to 30 June 2023 Key messages Total CSM (gross) • Total CSM (gross of tax) of £2.7 billion grew 5% in the first £2,594m as at FY22 half (FY 2022: £2.6 billion), p
Slide 18: Decrease in adjusted shareholders' equity in H1 2023 driven by statutory loss and dividend
Decrease in adjusted shareholders’ equity in H1 2023 driven by statutory loss and payment of 2022 Final dividend Movement of IFRS 17 adjusted shareholders’ equity over H1 2023 Key messages £5.2bn £0.1bn • IFRS 17 adjusted shareholders' equity has £0.1bn £4.8bn £(0.3)bn decreased by £0.4 billion due
Slide 19: Legal disclaimer
Legal disclaimer All information in this presentation is unaudited. This presentation 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/o
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