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Standard Life and Phoenix Group
Standard Life in Ireland is growing. We’re changing and adapting to new opportunities and challenges. We’re looking forward to the future with confidence and optimism.
Our commitment to the adviser market in Ireland continues. As before, we are committed to working with advisers to build better futures for our customers, to help them live the lives they want to, on their own terms.
Working in partnership
Susan McInnes talks about the ongoing commitment to the Irish adviser market.
Title screen 1:Susan McInnes, new CEO of Standard Life Assurance Limited on what the deal means for customers and advisers
Title screen 2: Open for new business
Firstly it’s important to say, we’re absolutely committed to writing profitable new business in Ireland, Germany and Austria, and the International Bond through Standard Life International, in line with existing market plans. We’re hugely excited about the opportunity that this brings.
Phoenix has never been entirely closed to new business; we have always had open elements within our company.
We’re excited to do this on a larger scale with Standard Life. Standard Life is the expert in this field and Phoenix will learn from them.
Title screen 3: Commitment to service
This transaction is very different to many deals that Phoenix has done in the past, because this time we’re taking on a very successful, vibrant and open business with a great record for service.
And secondly, the proof will be in the delivery of the service.
Title screen 4: Brexit ready
We have plans in place for Brexit and they’re progressing well to ensure we can continue to service European policyholders. It’s an exciting development and it’s a real endorsement of how well Standard Life does things in Dublin and it demonstrates a strong continuing commitment to Ireland. Once the plans are approved by the courts and the transaction is completed in the first half of 2019, Standard Life will be one of the largest insurers in Ireland.
Title screen 5: Looking to the future
Things remain the same - the service, the people, the systems, the Standard Life brand, the products and the strategy.
Personally, I’m very passionate about good customer outcomes. I believe they come from providing advisers with strong propositions and backing that up with strong relationships and service.
I’m really looking forward to working with advisers - working together to help our customers build better financial futures is hugely important to me.
Title screen 6: Standard Life. There’s a lot to look forward to.
Earlier this year Nigel Dunne , Director Europe and Michael McKenna MD Ireland spoke to us about their views on the partnership with the Phoenix Group
Recently, Standard Life Aberdeen announced plans for an enhanced strategic partnership with the Phoenix Group. I’m here today with Michael McKenna, MD of Standard Life in Ireland, and Nigel Dunne, Director of Standard Life Europe, and we’re going to talk about what the deal means for Ireland; for our customers, and advisers.
Nigel, to you first. Could you start by filling us in on what’s been happening in Standard Life in Ireland over the last few years?
Sure, and there has been quite a lot. Standard Life as a plc has been kind of changing its form for a number of years, against a stated objective of moving away from capital heavy insurance type business to capital light asset management type business. That started some years ago when we sold our Canadian business. You’ll have seen some acquisitions in the asset management space in recent years and I suppose the big change happened last year when the merger happened between Standard Life Investments and Aberdeen Asset Management, and that really changed substantially the form of Standard Life plc where the insurance part of the business became much smaller. And the strategic announcement that we’ve just… that we are talking about today is kind of the last step, the last big step, in the move from the plc perspective, to move into the space that it has been, where it’s stated objective has been.
OK, and is that something that’s quite unique to Standard Life Aberdeen or something you’re seeing more broadly in the market?
No, absolutely not. Maybe in an Irish context it is probably seen as different, but no we’re seeing right across the globe, the insurance sector is going through a lot of change. Even in recent weeks we’ve seen Prudential in the UK making an announcement about splitting their business; we have seen Old Mutual making changes; we have seen Aegon, in recent times, changing, so at that level there is a lot of change happening. And it is happening for a number of reasons, some are specific to the individual companies but some are more generic in nature. So, Solvency II has really had an impact. So, that really affects the kind of capital requirements that are needed in the insurance sector and that has driven some change. We are seeing technology, we are seeing consumer demands creating change, so there’s a number of dynamics, but we are certainly not unique and Standard Life has always tried to evolve, even though we have been around for a very long time, we still have to evolve to stay relevant. And I think the way we are setting ourselves up now will not be that unusual and we are going to continue to see change, and evolution, and how the ecosystem within the insurance sector evolves over the next number of years.
Michael, would you be able to give us a breakdown on the deal?
So, the deal is going to take place between Standard Life Aberdeen plc and the Phoenix Group in which the Phoenix Group will acquire the Life business from Standard Life Aberdeen, subject to shareholder approval, regulatory approval and some other approvals. The Life business in Standard Life includes Standard Life in Ireland and Standard Life in Germany. So, what it means from an Irish perspective is that Standard Life in Ireland will transfer to the Phoenix Group, however the people that currently service the Irish policy holders and Irish advisers will remain the same in the future as currently. The Standard Life brand will continue in Ireland; the Standard Life website will continue; and when people ring Standard Life for help and assistance they will still ring the same numbers and the people will answer as Standard Life. Our proposition will be enhanced. Our strategic plans will remain as they are, so we will continue to develop our proposition and our service and maintain the high level of service that we currently provide to Irish customers and advisers.
And Michael, Phoenix is known as a ‘closed life business’. What does that mean for Standard Life in Ireland?
So, they are known as a closed life business, but that’s not all that they do. They do write new business through Sunlife and they’ve been on record stating that this proposed deal is a transformation acquisition for them. So, they will move from having 5.6 million customers to 10 million customers and their assets will grow from 74 billion up to 240 billion sterling. So, it is transformational for them and they will create a new business stream and they will start to write new business, both through the UK, Ireland and Germany. So, for us in Ireland, the change will mean very little actually. So, we will continue to service our customers in the same way that we have in the past, continue to promote our products and our propositions in the same way as the past, and we will continue to promote the Standard Life brand as we have in the past.
OK. When we talk about this deal it’s often referred to as a partnership. What do we really mean when we say partnership?
Yeah, I think that’s a really important question and that partnership is happening at two levels. It is happening at an operational level in the UK where Phoenix would be providing a lot of the infrastructure, a lot of the servicing and the products for Standard Life to promote and sell in the UK through its advice business or via its platform but it’s also happening at a strategic level so what’s really important here is that as the deal has been structured, Standard Life will end up having a 20%ish shareholding in Phoenix, subject to the deal completing, which is really important. As well as that we’ll have two directors on the board of Phoenix, so there will be a very close relationship between the two entities and it is not like the business is being sold off to some distant third party. So, I think that is really critical because the two organisations will need to continue to have a very symbiotic relationship going forward and this kind of creates that connection. So, that’s why I am really confident that we can make this work and make this work really effectively for both our customers’ and our advisors.
Investments is a core part of our proposition here in Standard Life in Ireland. What does the proposed deal mean for that going forward?
We continue to believe that investments is going to be core to our proposition. Our relationship with Aberdeen Standard Investments will continue into the future and that combination will continue to be successful for both customers and advisers alike. We firmly believe that the strength of our investment proposition and our long term investment performance really sets us apart. So, going forward, Aberdeen Standard Investments will be our asset manager of choice as we look to enhance our investment proposition.
And I think what’s really important to remember as well is that in Ireland, we wrap our investment solutions in a life insurance product. That’s how the market works, that’s how we distribute our propositions. And in the UK, that’s not necessarily the case. You don’t need to be a life assurance company to promote SIPP’s and ISA’s and platforms so I think what is key for us is that, you know, we are providing a life assurance product, having an owner who is also a life assurance provider is really, really important and I think is very valuable in terms of our future plans.
OK. So, we are talking about a lot of change today, but in some ways, there’s not much change happening at all. I suppose the other element of change facing our business in Ireland at the moment is Brexit. How does the proposed partnership affect our plans there?
Yeah, the partnership in itself doesn’t change our Brexit plans and indeed our Brexit plans were part of the sale process and Phoenix have been very supportive of our plans and the operating model that we had determined would be in those Brexit plans. So, Brexit, you know, we are preparing as we have been for some time for a hard Brexit. So, we are preparing for the end of March 2019 and centre to those plans is that Ireland would become the hub of our European business. And our German and Irish branch businesses would become part of Standard Life International, creating a very substantial life assurance business in Dublin and a very substantial base for us and a significant base for us in the context of the group. So, plans are absolutely continuing as were. Phoenix have, interesting in the context of the Phoenix deal, they have, they are on record on saying how ambitious they are about growing in Europe, and the advantage of this deal for them is they end up with two kind of flagpoles in Europe. They have got Dublin with the base that we’re creating here and that central base and we have also got the base in Germany which again gives them potential opportunities to leverage that as well. So, I think what is really important from a Standard Life Ireland perspective is now we are going to be a very significant part of a life assurance business into the future. And that all goes for very well for the business here.
So you mentioned Standard Life International there, and they provide the international bonds into the UK. Will that be impacted by the proposed partnership?
Yeah absolutely, we established Standard Life International in Dublin fundamentally to provide that international bond back into the UK and that continues exactly as is and there is a commitment within the deal that Phoenix, via our entity in Dublin, will continue to promote and to service the product in exactly the same way as we have heretofore. So, there should be no change of experience from a UK advisers’ perspective in terms of that proposition.
How are we going to keep our customers and advisers informed between now and the proposed completion date in Q3?
So, as I said earlier, the proposed transaction is subject to shareholder approval, regulatory approval and some other approvals. As part of the shareholder process there is a vote scheduled for May and in advance of that vote there will be a circular issued which will contain much more detail around the proposed transaction. From an adviser’s perspective, we will keep them informed through their regular dialogue with the Business Managers and through updates on our websites. We are also planning a number of events and roadshows over the coming weeks and that will give us the opportunity to have a dialogue with, a face-to-face dialogue, with our advisers.
So, there is certainly a lot going on. What’s next?
There is lots going on between Phoenix and Brexit but for our customers and advisers it should be seamless. We will hold our Standard Life values and our purpose will remain.
OK, thank you very much. You can keep up-to-date with the latest news on this strategic partnership on standardlife.ie or brokerzone.ie