Just Group plc | Annual Report and Accounts 2024
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GOVERNANCE IN OPERATION continued
Section 172(1) factors: Long term Colleagues Business relationships
HOW THE BOARD CONSIDERED STAKEHOLDERS DURING THE YEAR The Board sets the strategic direction, culture and values for Just. The Directors collectively have a diverse set of skills, knowledge, experience and stakeholder expertise, which assists the Board in making well-informed decisions, which promote the long-term sustainable success of the Company. At each Board meeting, detailed papers provide information on the impacts of decisions on stakeholders, including customer experience outcomes, sustainability considerations, and risks that require the attention of the Board. The Group’s Section 172(1) statement can be found in the Strategic report on page 61. The table below sets out examples of how factors under Section 172(1) of the Companies Act 2006 and engagement with stakeholders had fed into Board discussion and decision making on key topics. More information on Board engagement with stakeholders can be found on pages 58 to 60.
Community and environment High standards of conduct Investors
Consumer Duty
S172 factor considered: Background The Board is responsible for the oversight of Consumer Duty and, as part of its regulatory obligations, it must review a report, which sets out the results of its monitoring activities and any actions required at least annually. How the Board approached it In 2024, the Board received regular reports on the governance arrangements to embed Consumer Duty, the status of the delivery of the second phase of the Group’s Consumer Duty programme and a detailed view of Just’s reporting framework. Appropriate time was allocated during the Board meetings to give Directors the opportunity to challenge management on its approach to delivering good customer outcomes. In July 2024, the Directors considered an assessment of whether Just was delivering good outcomes for its customers, which were consistent with the Duty. As part of the review, the Directors considered whether there was any evidence of poor outcomes and if the experience of any group of customers was worse than others and why. The Board also reflected on the actions that had been taken to address any risks or issues identified by the business and whether the Group’s future business strategy was consistent with acting to deliver good customer outcomes under the Duty. The Board noted that implementing the Duty was a natural extension of the Group’s business strategy and it was intrinsic to Just’s purpose to help people achieve a better later life. The Board considered the various activities that had been undertaken as part of continuous development to deliver good customer outcomes and whether Just’s practices were aligned with regulatory expectations. The Board received an update on resourcing requirements to embed Consumer Duty across the business. The Directors discussed the steps that had been taken to ensure colleagues understood Just’s approach to delivering good customer outcomes and noted that training and support was provided to ensure colleagues fulfilled their roles and responsibilities. In addition, the Remuneration Committee approved strategic performance metrics for senior management, which included measures aligned with the delivery of good customer outcomes. Outcome After assessing the work undertaken by the business to deliver good customer outcomes, and taking into consideration customer experience, regulatory expectations, colleagues’ responsibilities and resourcing needs, and the long-term strategy of the business, the Board concluded that the Group was in full compliance and approved its first annual Board report on Consumer Duty. The Board also agreed that there were opportunities to further enhance its data gathering and production of management information to monitor customer outcomes, which would be a main focus area for the business in the year ahead. The Board continues to receive regular updates on Consumer Duty and all papers must now include an explanation on the impact on customer experience and outcomes to aid the Board’s oversight of the delivery of good customer outcomes.
FUNDED REINSURANCE COUNTERPARTIES
S172 factor considered: Background
In 2024, the PRA published its new policy expectations in respect of funded reinsurance arrangements for life insurance firms. The Board considered the impact of the changes and what actions needed to be taken by Just to ensure compliance with the new requirements. How the Board approached it The Board received a detailed update on changes to regulatory requirements, which were published by the PRA in its Supervisory Statement (SS)5/24 in relation to funded reinsurance. The changes build on existing regulatory requirements and expectations that apply in respect of firms’ reinsurance arrangements. The Board assessed Just’s alignment and compliance with the new regulatory requirements. As part of the discussions, the Board considered the Group’s reinsurance strategy and the approach required to support the needs and growth ambitions of Just’s Defined Benefits business, when determining what actions should be taken. One area of focus during the Board discussion was reinsurance counterparty limits. The Board revisited the current risk appetite noting that Just’s reinsurance strategy and financial position had evolved over time, and it also took into consideration the new regulatory expectations from the PRA. An important focus area was the need to offer competitive prices to Just’s customers, while also ensuring that appropriate processes and controls are in place to protect policyholders in the event that a reinsurer fails to deliver on its contractual commitments. Outcome After considering Just’s long term reinsurance strategy and stakeholder expectations, the Board approved changes to the reinsurance counterparty risk appetite and associated limits.
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