Phoenix Group has announced it's considering selling its SunLife financial services arm.
In the wake of the news, shares in the pensions and insurance giant took a dip as market experts pointed out that the move to offload seemed "slightly odd". On Wednesday morning, Phoenix informed investors that it's on the hunt for a buyer for the firm catering to the over-50s.
The FTSE 100 giant stated: "Following a strategic review, the group has concluded that this business is no longer core to the delivery of its vision of becoming the UK's leading retirement savings and income business. The board has therefore decided to begin a sale process, having received a number of initial expressions of interest from third parties."
However, Phoenix emphasised that at this point, there's "no certainty" that a deal will be struck to sell the division. SunLife, which became part of Phoenix following a £375million acquisition in 2016, was reported to have contributed a pre-tax profit of £16million in 2023.
Abid Hussain, an analyst at Liberum, remarked: "At first glance, it is slightly odd that a life consolidator would be making a disposal, but remember, under their new strategy, it is hoping to transform into a proper life insurance company focusing on the retirement space (pensions and annuities)."
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"Management concluded the protection book did not fit any more. With a 10% dividend yield and more cash, potentially, coming in the door to support the capital generation and avoiding an upgrade of legacy protection systems, this makes some sense."
Phoenix shares saw a decrease of 1.6% following early trading.
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