UPDATE 1-UK’s Phoenix Group posts higher profit, cash for 2017

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(Adds details on Brexit impact, cash targets, closed life market)

March 15 (Reuters) – Insurer Phoenix Group Holdings , the owner of life assurance funds closed to new customers, reported higher operating profit and said it was in exclusive talks for its first bulk purchase annuity transaction.

The insurer, which makes money by buying European life insurers that are closed to new customers and running them more efficiently, said it generated 653 million pounds ($913 million) cash in 2017, up from 486 million pounds a year earlier.

Operating profit rose to 368 million pounds in the year from 351 million pounds a year earlier.

Phoenix said it expected to generate 2.5 billion pounds of cash between 2018 and 2022, adding that it expects to achieve the top end of its 1-1.2 billion pounds cash generation target range for the two-year period between 2017 and 2018.

Phoenix last month agreed to buy the bulk of Standard Life Aberdeen’s insurance business for 3.24 billion pounds in a bid to become Europe’s largest manager of books of mature business from insurance companies.

Phoenix said on Thursday it would continue to target consolidation opportunities in the closed life market.

The company said Britain’s decision to leave the European Union was not expected to have any material direct impact on the group, but added it might be affected by the indirect hit on investment markets from ongoing Brexit negotiations in 2018.

Phoenix’s deal for Standard Life Assurance acquisition includes branch operations in Ireland and Germany, it said, adding these could be transferred to an Irish subsidiary.

$1 = 0.7155 pounds
Reporting by Noor Zainab Hussain in Bengaluru
Editing by Saumyadeb Chakrabarty

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