By Carolyn Cohn
Standard Life-Aberdeen has agreed to sell the bulk of its insurance business to UK insurer Phoenix Group for £3.24bn (€3.7bn) allowing it to focus on savings and investment products.
Standard Life-Aberdeen will receive £2.3bn in cash and a 19.9% stake in Phoenix, which is raising £1bn to fund the deal to become Europe’s largest manager of books of mature business from insurance companies.
The sale is part of a long-standing drive by the Standard Life business to exit insurance, which carries onerous capital rules as a result of the industry’s European Solvency II rules.
Standard Life merged with Aberdeen Asset Management last year in an £11bn deal. By exiting insurance, Standard Life-Aberdeen has also cleared one of the hurdles to regaining control of a £109bn investment mandate from Lloyds Banking Group, which the bank last week said it was pulling due to competition concerns linked to their shared insurance businesses.
Analysts expect the capital generated from the sale to be deployed in buybacks and or deals. Standard Life- Aberdeen also revealed its co-chief executive Keith Skeoch’s pay rose 9% to £3m last year.
Skeoch was formerly the chief executive of insurer and asset manager Standard Life. His co-chief executive Martin Gilbert, Aberdeen’s former boss, was paid £1.3m for his time on the board of Standard Life-Aberdeen, it said in its annual report.
Standard Life-Aberdeen did not provide details of Gilbert’s pay before the merger and was not immediately able to say what he earned during the period while he was still chief executive of Aberdeen.
Standard Life-Aberdeen also said it had changed its remuneration policy to cut future maximum pay packages for its top executives to bring it into line with peers, as it shifts to an asset management focus.
Standard Life-Aberdeen also published its gender pay gap, fulfilling a new British government requirement.
As of April 2017, men were paid on average 34% more than women at Aberdeen, and 42% more than women at Standard Life.
The figures show a larger gap than for insurer and asset manager Aviva, which published a gender pay gap below 30% last month.
Standard Life-Aberdeen also said pro-forma adjusted pre-tax profit for 2017 came in at £1.04bn, down 0.5% but in line with market consensus.