Phoenix Group, the UK’s largest owner of life assurance funds, has set itself a long-term cash generation target of £2bn ($2.8bn) over the next four years.

The FTSE 250-listed firm, which buys pension books closed to new investors, delivered an operating profit of £324m in 2015, down from the previous year’s £483m figure.

Cash generation over the course of last year reached £225m, less than half of 2014’s sum but in line with its earlier target range of £200m-£250m.

Led by chief executive Clive Bannister, Phoenix has been simplifying its structure and dealing with the introduction of the EU’s Solvency II legislation.

New pension freedom rules introduced in April have also added to the group’s workload.

The business has around 4.5 million policyholders and £47bn in assets held by its life companies.

In its statement on Wednesday, Phoenix predicted further consolidation in the UK life sector, as existing providers struggle with regulation, increased capital requirements and shortages of skilled personnel to manage complex legacy products.

Chairman Harry Staunton said Phoenix has the operating model in place to take advantage of the changing environment.

He added that the firm will only make acquisitions that are value accretive, would sustain the current dividend per share and support its investment grade credit rating, which Phoenix received from Fitch last year.