Next top-up - life insurance - Phoenix?

[Dod1010]

I thought I'd look at the dividend CAGR of insurance companies I've had an interest in (figures include specials):

Based on the above, if buying for a growing income stream, I'd be interested in Legal and General, Direct Line Group or Standard life. Admiral might also be worth looking into.

The figures you quote reflect the views I have expressed previously. The first is that Chesnara is much further down the line in developing its model than Phoenix, which has spent a lot of its last few years consolidating its many life companies and trying to reorganise its debt. I expect the benefits of that to flow through before long and in the meantime I am enjoying the yield.

The second is, although I hold Admiral, I have a feeling that its best days may be behind it. A poster mentioned earlier on this thread that a revision of Ogden upwards will help L & G and Aviva but it would help Admiral very much more. In fact I doubt it would have much impact on the first two. A revision of Ogden would only have a one off impact in any case.

Standard Life is now a different beast with the (albatross?) impact of Aberdeen on its shoulders.

Dod

[vrdiver]

Standard Life is now a different beast with the (albatross?) impact of Aberdeen on its shoulders.
Dod

Agreed, the figures I quoted are for the old Standard Life, not the combined SL and Aberdeen Asset Management behemoth!

Looking at Aberdeen's CAGR* gives (approximately) 0, 16.5% and 17.5% for the 1, 5 and 10 year CAGRs, so not a bad growth rate to merge into SL (the last year I can see is 2016, which was held vs 2015). I'd like to think that the combined group is going to make some cost savings, so perhaps a bit more oomph left in the beast?

Re Phoenix, I hope you're right; if inflation takes off they'll need to get their act together pretty quickly lest their dividend rises are overtaken by CPI !

VRD


*Data from https://www.dividendmax.com/united-king ... /dividends

[vrdiver]

Many thanks to OZYU who spotted a mistake in my numbers!

Divi data on PHNX is incorrect because you need to take into account the rights issue, which leads to a correction factor of about 0.8 IIRC for divis Before the rights. It changes the picture somewhat to a very positive 5 year CAGR near 7%, since PHNX have already indicated that the base for the full year is 50.2p.

Look in the dividenddata web site, where they always do the correction.

Makes me feel better about owning PHNX!
VRD

[Wasron]

Wasron's point was exactly why I ignored Phoenix for many years. I was interested in a growing business model which could carry on for decades churning out products and profits. It seemed to me the zombie model was far from attractive. However, I took the plunge accepting the argument that there is a place for a high income which will not grow so much, but is relatively stable over the rest of my probable lifetime requirement."
[/i]
Arb.

I think Arb's last point is key when thinking about the likes of Phoenix and Chesnara. My reservations about them stem in part because the average age of the customer base in their books of business is likely to be older than myself (I'm 40), so by the time I'd need them to be a cash cow the proverbial udders may have nearly run dry.

My comment last night referring only to charges on pensions was just for the sake of brevity, the same applies to all non-protection investments with a life assurer. The automation and use of the internet now means that the charges levied in the 80s and 90s are simply unjustifiable. Whole swathes of charges have therefore been rebated or removed from existing products by providers open to new business. So even if the zombies continue to add new books of business I would expect each to become progressively less profitable.

Dod's comment about releasing capital as policies mature is no doubt true, but over the last 20 years the mix of products sold has changed, with customers increasingly using ISAs rather than bundled investment products, so again I don't think this source of revenue will last long enough to see me benefit from it in my own retirement.

Regards, Wasron

[Dod1010]

If Wasron reads the Annual Report of Phoenix he will see that there are still about £300 billion of closed funds assets in the UK according to their estimate. They manage about £75 billion so they (and Chesnara) have a lot to go for. It is probably true that this is in most sense a 'dieing (Spelling?) market and if I were 40 I would probably share some of Wasron's concerns. Once again though, we have the dichotomy between those using a HYP as a long term savings vehicle (which I assume Wasron is) and those (like me) who are using a HYP as it was originally promoted as, which is as a source of fairly dependable and increasing, income for the foreseeable future.

Phoenix meets those requirements I think and answers the OP's question does it not?

Dod

[Alaric]

They manage about £75 billion so they (and Chesnara) have a lot to go for.

Aviva have quite a big chunk as well after their merger with Friends Life. Perhaps Legal & General would be preferred to Aviva on the grounds that it ought to be a simpler group to run and thus cheaper in administration costs.

[idpickering]

Are you still going for Phoenix then ZipserSir? Seems like mixed feeling from our tem here.

Ian.

[mao44]

The Friends Life purchase was not zombie products. The vast majority, if not all of the FL products are still open to new business. I am a former employee.

[tjh290633]

Didn't AV. Take over Friend's annuity business? My recollection is that Friend's decided to stop writing it.

TJH

[escalader]

The Friends Life purchase was not zombie products. The vast majority, if not all of the FL products are still open to new business.

AV. also got AXA Sun Life's Closed book business which had just been merged in by what used to be Pearl.