Phoenix Group to stick to closed life books after Standard Life Aberdeen deal

* To stick to closed life, bulk annuity deals

* Sees (Shanghai: 600481.SS - news) opportunities in Germany, Ireland (Other OTC: IRLD - news)

* FY operating profit 368 mln stg vs 351 mln stg (Adds CEO, finance director comments, details)

By Noor Zainab Hussain

March 15 (Reuters) - Phoenix Group said it would not change tack and buy open books of insurance, following a recent deal to buy the majority of Standard Life Aberdeen's insurance business and become Europe's largest manager of books of mature business.

Phoenix bought SLA's ongoing Irish and German insurance businesses, as well as closed books of annuities, in a 3.24 billion pound ($4.52 billion) deal announced last month.

"We are a closed life business and it would fly in the face of our strategic logic," CEO Clive Bannister told Reuters when asked about the possibility of expanding into open books.

"We are over 95 percent focused on the closed life business because that is the skill set and that is the area we wish to put our capital behind," he said.

Phoenix's existing open book businesses account for about 1.5 percent of its profit Bannister said.

One industry source had told Reuters that the Standard Life (LSE: SL.L - news) Aberdeen deal signalled a broader move into insurance.

The insurer, which makes money by buying European life insurers that are closed to new customers and running them more efficiently, said on Thursday operating profit rose to 368 million pounds in 2017 from 351 million pounds a year earlier.

Phoenix also said it was in exclusive talks for its first bulk purchase annuity deal. Bannister declined to provide a price tag for the purchase, except to say it was a small deal.

Bulk annuity deals involve insurers taking over a company's final salary pension scheme and are becoming more common as businesses look to reduce their risks and insurers look for new sources of income.

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.

Finance Director Jim McConville said a significant portion of the 1.2 billion pounds would be available for investment in the bulk purchase annuity market and to help fund closed life transactions.

"In the bulk purchase annuity market we are not going to do a very large transaction such as Prudential (SES: K6S.SI - news) , where we would have to go out and raise additional capital," McConville said.

Prudential disclosed the sale of a 12 billion-pound UK annuities book to Rothesay Life on Wednesday.

Phoenix's deal with SLA includes branch operations in Ireland and Germany, it said, adding these could be transferred to an Irish subsidiary.

The FTSE 250 company said the deal would extend its market opportunity from 380 billion pounds of closed life assets in the UK to 540 billion pounds including Germany and Ireland.

"We have an exposure to Germany and Ireland and it brings with it a Brexit dimension. Our colleagues at SLA have thought through this and have their own Brexit plans," Bannister said. ($1 = 0.7174 pounds)

(Reporting by Noor Zainab Hussain in Bengaluru; additional reporting by Carolyn Cohn; Editing by Saumyadeb Chakrabarty and Adrian Croft)