LEI: 2138001P49OLAEU33T68

Phoenix Group extends partnership with Tata Consultancy Services (TCS)

Phoenix Group, the UK's largest long-term savings and retirement business, today announces plans to extend its long-standing partnership with leading global technology and IT services provider Tata Consultancy Services (TCS). Phoenix will be moving c.3 million policies from its Alpha platform to the TCS BaNCS^TM platform provided by TCS's UK subsidiary Diligenta, a leading provider of business process services to the life and pensions industry.

As part of its acquisition of ReAssure in 2020, Phoenix took ownership of the Alpha administration platform, which manages legacy ReAssure products. Since then, Phoenix has operated the Alpha platform in-house, alongside its outsourced partnership with TCS.

Over the past three years, Phoenix has deepened its relationship with TCS and Diligenta - announcing the movement of its Standard Life business to TCS in 2019 and more recently through the proposed acquisition of Sun Life of Canada UK which already uses the TCS BaNCS^TM platform.

Consolidating all policies on TCS BaNCS^TM will allow the business to benefit from TCS's significant ongoing investment in the platform with Phoenix customers benefiting from the clear digital focus, consistent customer journeys and customer proposition provided by one platform. 

The Alpha platform will be decommissioned, with all policies moving on a staggered basis to TCS BaNCS^TM. It is expected this will be complete by 2026. Some back office administrative processes will be moved to TCS's operational hub in India.  All of the customer call servicing will remain within TCS's UK operations with the plan to operate the customer contact centre from the existing Phoenix Telford site using ReAssure operational teams.

This will eventually lead to the closure of the Phoenix site in Hitchin by 2026.

Phoenix is working with TCS to finalise the detail of changes proposed, and - at an appropriate time - will enter consultation with impacted employees. Phoenix will look to ensure that redundancies are kept to a minimum wherever possible, for example through redeployment opportunities and natural attrition.

This transformation programme is also fully aligned with Phoenix Group's model of enhancing long term cost efficiency, with a further c.£0.2 billion of net cost synergies now expected to be realised from the ReAssure integration. These synergies comprise annual post-tax cost savings of c.£35 million per annum, valued at c.£0.4 billion which increases long-term cash generation, and post-tax integration costs estimated at c.£0.2 billion incurred by the Group. The estimated impact on the Group's key financials are:

·    c.£0.2 billion increase in Group long-term free cash

·    Broadly neutral impact on Solvency II surplus

Commenting on the announcement, Phoenix Group CEO, Andy Briggs said:

"We continually review our operating model to ensure it is meeting the evolving needs of our customers on their journey to and through retirement. Since the acquisition of ReAssure in 2020, Phoenix has been operating two customer administration platforms concurrently. This gave us optionality in the short-term, but over the long term, it makes more sense to consolidate policies onto the TCS BaNCS^TM platform. It will remove duplicate investment, fully leverage the advantages of our strategic relationship with TCS and ensure we maintain cost efficiency. It will enable Phoenix customers to benefit from the clear digital focus, consistent customer journeys and customer proposition provided by one platform.  

"While this transformation will lead to the transfer of a number of roles from existing ReAssure sites, we are committed to supporting all those employees who will be impacted and will do whatever we can to minimise redundancies."

Enquiries

Investors/analysts:

Claire Hawkins, Director of Corporate Affairs and Investor Relations, Phoenix Group

+44 (0)20 4559 3161

Andrew Downey, Investor Relations Director, Phoenix Group

+44 (0)20 4559 3145

Media:

Douglas Campbell, Teneo

+44 (0)7753 136 628

Shellie Wells, Corporate Communications Director, Phoenix Group

+44 (0)20 4559 3031

Legal Disclaimers

This announcement in relation to Phoenix Group Holdings plc and its subsidiaries (the 'Group') contains, and the Group may make other statements (verbal or otherwise) containing, forward-looking statements and other financial and/or statistical data about the Group's current plans, goals, ambitions and expectations relating to future financial condition, performance, results, strategy and/or objectives.

Statements containing the words: 'believes', 'intends', 'will', 'may', 'should', 'expects', 'plans', 'aims', 'seeks', 'targets', 'continues' and 'anticipates' or other words of similar meaning are forward looking.  Such forward-looking statements and other financial and/or statistical data involve risk and uncertainty because they relate to future events and circumstances that are beyond the Group's control. For example, certain insurance risk disclosures are dependent on the Group's choices about assumptions and models, which by their nature are estimates. As such, actual future gains and losses could differ materially from those that the Group has estimated.

Other factors which could cause actual results to differ materially from those estimated by forward-looking statements include, but are not limited to: domestic and global economic, social, environmental and business conditions; asset prices; market related risks such as fluctuations in interest rates and exchange rates, the potential for a sustained low-interest rate environment, and the performance of financial markets generally; the policies and actions of governmental and/or regulatory authorities, including, for example, initiatives related to the financial crisis, the COVID-19 pandemic, climate change and the effect of the UK's version of the "Solvency II" requirements on the Group's capital maintenance requirements; the impact of inflation and deflation; the political, legal, social and economic effects of the COVID-19 pandemic and the UK's exit from the European Union; information technology or data security breaches (including the Group being subject to cyberattacks); the development of standards and interpretations including evolving practices in ESG and climate reporting with regard to the interpretation and application of accounting; the limitation of climate scenario analysis and the models that analyse them; lack of transparency and comparability of climate-related forward-looking methodologies; climate change and a transition to a low-carbon economy (including the risk that the Group may not achieve its targets); market competition; changes in assumptions in pricing and reserving for insurance business (particularly with regard to mortality and morbidity trends, gender pricing and lapse rates); the timing, impact and other uncertainties of proposed or future acquisitions, disposals or combinations within relevant industries; risks associated with arrangements with third parties; inability of reinsurers to meet obligations or unavailability of reinsurance coverage; the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which members of the Group operate.

As a result, the Group's actual future financial condition, performance and results may differ materially from the plans, goals, ambitions and expectations set out in the forward-looking statements and other financial and/or statistical data within this announcement. The Group undertakes no obligation to update any of the forward-looking statements or data contained within this announcement or any other forward-looking statements or data it may make or publish.  Nothing in this announcement constitutes, nor should it be construed as, a profit forecast or estimate.