- Insurance company Phoenix has reported 'strong' cash generation in the first half of 2020 due to new business and raised its 2020 cash generation target range following its acquisition of ReAssure in July.

The group announced cash generation of £433m in the six months ended 30 June, up from £287m in the first half of 2019, with new business in the first half of the year delivering £358m of incremental long-term cash generation.

Phoenix said that its focus on 'resilience' was reflected in a Solvency II surplus of £4bn as at 30 June, compared to £3.1bn at the end of 2019, and supported an interim dividend of 23.4p per share.

Group operating profit of £361m in the first six months of 2020 was up from £325m in the same period a year earlier.

The company completed the acquisition of ReAssure on 22 July 2020, establishing it as the largest long-term savings and retirement business in the UK.

Phoenix and ReAssure delivered £1.1bn of cash generation in the first half of 2020 on a pro-forma basis.

Phoenix said the transaction brings an additional £7bn of long-term cash generation and has enabled it to increase its 2020 cash generation target range from £800m-£900m, to £1.5bn-£1.6bn.

Group chief executive Andy Briggs said: 'The resilience of Phoenix's business model has been evidenced through this period and ensured the continued delivery of cash and growth, which underpins our ability to continue to pay dividends in accordance with our stable and sustainable dividend policy.'

Phoenix reported a shareholder capital coverage ratio of 169% as at 30 June 2020, up from 161% at 31 December 2019, and said there were no defaults in the first half of 2020 and only 0.1% of bonds in the matching adjustment portfolios downgraded to sub investment grade.

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