Andy Briggs, the CEO of Phoenix Group, has consented to a reduction of £70,000 from his annual bonus as the insurer revealed notable discrepancies in its financial reports for the second consecutive year.

The FTSE 100 firm admitted to having discovered significant errors in its previously reported financial results, necessitating a restatement of its assets, liabilities, operating income, and shareholder equity.

Katie Murray, the chairwoman of the audit committee and chief financial officer at NatWest, highlighted the presence of “operational weaknesses” in the company’s internal controls.

Briggs faced this penalty due to ongoing issues first identified in 2023, which persisted into 2024 and had a greater impact than initially anticipated, as noted by the Phoenix board in their annual report.

Rakesh Thakrar, who departed from his role as chief financial officer in May, also received a bonus cut of £57,000 due to these issues.

This marks the second consecutive year that both executives have faced consequences for accounting errors, with Briggs’s bonus previously reduced by £50,000 and Thakrar’s by £75,000. Following the deduction, Briggs’s total compensation amounted to £3.45 million, an increase from £2.97 million in the previous year.

In a move to address these issues, the auditing firm EY was replaced by KPMG in May, alongside changes within the internal audit department, including the exit of chief audit officer Ian Gray. Briggs clarified that these changes were not a direct result of the accounting challenges.

Despite the accounting missteps, Phoenix shares saw a 9.5 percent increase, reaching 573.5p in afternoon trading, following a reported 22 percent rise in operating cash generation to £1.4 billion for 2024, prompting an upward revision of financial targets.

As one of the largest life and pensions providers in the UK, Phoenix serves 12 million customers under various brands, including Standard Life, Phoenix Life, Sun Life, and Reassure.

Briggs stated that the operating cash target was met two years ahead of schedule, with intentions to increase it by mid-single-digit percentages annually. Additionally, he raised projections for total cash generation and operating profits, pleasing investors.

Adjusted operating profit surged 31 percent to £825 million, driven by growth in both the pensions and savings sectors, as well as retirement solutions. The pensions division alone saw a remarkable 66 percent increase, with Phoenix recording inflows of £5.3 billion from workplace pension schemes.

In the Retirement Solutions segment, Phoenix secured £1 billion in individual annuity premiums, up from £600 million the previous year, capturing a 12 percent market share after re-entering the market in 2023. However, there was a decline in bulk purchase annuity business, dropping from £6.2 billion to £5.1 billion.

Phoenix attributed the accounting errors to challenges faced while implementing IFRS 17, a new accounting standard for insurance contracts. The reported loss for 2023 of £88 million was corrected to a profit of £84 million, while adjusted profits were revised to £629 million, up from £617 million. Adjusted shareholders’ equity was reassessed to £4.8 billion, rather than £4.6 billion.

Briggs commented on the IFRS 17 implementation delay, saying, “It wasn’t our proudest hour.” Regarding interactions with the Prudential Regulation Authority, he noted, “They weren’t disagreeing with that [assessment], let’s put it that way.”

A 2.6 percent increase in the final dividend to 27.35p brings the total for the year to 54p, with Phoenix being one of the largest dividend payers within the FTSE 100, boasting nearly a 10 percent yield.