Governance Financial Statements
Strategic Report
37
HIGHLIGHTS FROM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION The table below presents selected items from the Condensed consolidated statement of financial position. The information below is extracted from the statutory consolidated statement of financial position.
31 December 2024 £m
31 December 2023 £m
Assets Financial investments
34,390
29,423
Reinsurance contract assets Cash available on demand
2,067
1,143
808 657
546 726
Other assets Total assets
37,922
31,838
Share capital and share premium
199 944
199 943
Other reserves
Retained earnings and other adjustments
(219)
(259)
Total equity attributable to ordinary shareholders of Just Group plc
924 322
883 322
Tier 1 notes
Non-controlling interest
–
(2)
Total equity
1,246
1,203
Liabilities Insurance contract liabilities Reinsurance contract liabilities
27,753
24,131
94
125
7,889
5,608
Payables and other financial liabilities 1
Other liabilities Total liabilities
940
771
36,676 37,922
30,635 31,838
Total equity and liabilities
1 Other payables has been aggregated with other financial liabilities in all periods presented.
The amounts reported in the Condensed consolidated statement of financial position above for Insurance and Reinsurance contracts include our best estimate, risk adjustment and contractual service margin “CSM”. The analysis of these as reported in note 22 is included below.
31 December 2024 Net Reinsurance £m
31 December 2023 Net Reinsurance £m
Gross £m
Net £m
Gross £m
Net £m
Best estimate Risk adjustment
23,970
(838) (732) (403)
23,132
20,758
64
20,822
1,052 2,731
320
924
(592) (490)
332
CSM
2,328
2,449 24,131
1,959 23,113
Net closing balance
27,753
(1,973)
25,780
(1,018)
After tax, the closing CSM is £1,750m (31 December 2023: £1,471m).
FINANCIAL INVESTMENTS During the year, financial investments increased by £4.9bn to £34.5bn (31 December 2023: £29.6bn). Excluding derivatives and collateral, and gilts purchased in relation to the interest rate hedging, the core investments portfolio on which we take credit risk increased by 13% to £27.0bn. The increase in the portfolio has been driven by investment of the Group’s £5.3bn of shareholder backed new business premiums and credit spread tightening, offset by the increase in long-term risk-free rates at the 2024 year end compared to the previous year end, which decreases the market value of the assets (and matched liabilities). The credit quality of the Group’s bond portfolio remains resilient, with 62% rated A or above (31 December 2023: 54%), driven by an increase in allocation to UK government gilts. Our diversified portfolio continues to grow and is well balanced across a range of industry sectors and geographies. We continue to position the portfolio with a defensive bias. The Group continues to have very limited exposure to those sectors that are most sensitive to structural change or macroeconomic conditions, such as auto manufacturers, consumer (cyclical), energy and basic materials. The Group has further increased its infrastructure investments, driven by social housing and private placement assets. We continue to increase long income real estate assets from a low base as we originated a number of large investments internally through our in-house team, but reduced the allocation towards other sectors. The increase in government bonds and liquidity is driven by the tighter corporate credit spreads, with excess cash and gilts expected to be recycled into corporate credit and illiquid assets as opportunities arise. The BBB rated bonds are weighted towards the most defensive sectors including utilities, communications and technology, and infrastructure. We prudently manage the balance sheet by hedging all foreign exchange and inflation exposure, and continue to execute strategic interest rate hedging. This involves the purchase of £4.0bn of long dated gilts, which are held at amortised cost under IFRS. The effect is to significantly reduce the Solvency II sensitivity to future interest rate movements, without exposing the IFRS position to interest rate volatility on these assets.
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