Phoenix has confirmed it will enter the buy-in and buyout market on an "incremental" basis after completing its first buy-in with its own pension scheme in 2016.
In its half-year results published on 24 August, group chief executive Clive Bannister said the firm had "the skills and financial resources… to compete selectively on accretive transactions to generate incremental value".
He said the closed book consolidator will seek to take advantage of an estimated £350bn worth of demand from defined benefit (DB) trustees to de-risk their scheme over the next 10 years.
Phoenix Life completed a £1.2bn buy-in for its PGL Pension Scheme last November, converting an existing longevity swap into a bulk annuity contract for around 4,400 pensioners and dependents, and including longevity and investment risk.
The deal was the first instance of a longevity swap being unwound and converted to a bulk annuity.
More than £5bn of bulk annuity transactions were written in the first half of 2017, almost double in the same period, and with Phoenix joining the market the second half of the year may also see a significant number of deals.
Phoenix said it also has an eye on "a potential complementary source" of back-book annuity deals.
The results also revealed the firm had seen its operating profit more than double since last year, recording £215m in H1 compared to £107m in the same period last year.
It wrote £274m of individual annuities in the first half of the year, up from £254m in H1 last year, with £192m of these with guaranteed annuity rates.
The company also confirmed members of its contract-based workplace pensions would benefit from a reduction in annual fees to 1% at the end of 2017, estimated to cost the group around £28m.
The firm said it had generated £360m of cash in H1, up from £147m in 2016. It cited £165m of this was thanks to its acquisition of AXA Wealth's pensions and protection business, with a further £7m of cost synergies generated from its purchase of Abbey Life.
"The group continues to deliver strong cash generation and remains on track to achieve its targets, supported by capital and cost synergies from the AXA and Abbey Life acquisitions," Bannister added.
Just Group has completed a £74m pensioner buy-in with the UK pension scheme of a US-listed engineering business.
The Smiths Industries Pension Scheme has secured a £146m buy-in with Canada Life in its fourth bulk annuity and its sponsor’s tenth overall.
The Prudential Staff Pension Scheme has entered into a £3.7bn longevity swap with Pacific Life Re, insuring the longevity risk of over 20,000 pensioners.
The Baker Hughes (UK) Pension Plan has secured approximately £100m of liabilities through a buy-in with Just Group.
There have now been a total of 30 longevity swaps over £1bn publicly announced. The full list, provided by Willis Towers Watson and through PP research, is as follows...