JUST GROUP PLC Annual Report and Accounts 2021
BUSINESS MODEL
Our business model converts the growth opportunities in our markets to deliver positive outcomes for customers, shareholders and colleagues.
GROWTH OPPORTUNITIES:
HOW WE CREATE VALUE:
We have a growing ageing population with evolving needs.
We have created a sustainable business model that organically generates capital to support growth. We assess the risks related to the policies we sell and howmuch income we expect to provide to our customers. We charge a margin on the initial amount received in exchange for accepting the risk over the lifetime of the policy. We invest the margin and our customers’ pension savings in high quality assets, including the lifetime mortgages we originate. This generates financial value whilst ensuring we are able to pay policyholder pensions as they fall due.
People approaching and in-retirement will have a unique set of circumstances and be exposed to a number of risks. These risks include: • their defined benefit pension scheme running into financial difficulty; running out of money; • being unable to plan their financial affairs; • increasing and uncertain care costs; • not achieving the lifestyle which they could actually afford; • being invested in inappropriate products and securities; and • inflation outpacing their savings. Our solutions service these needs and our scalable and sustainable business model is built to optimise value from those solutions.
RISK SELECTION Selecting the right risks and pricing our products appropriately PrognoSys™ is our powerful proprietary tool for pricing and reserving that allows the Group to identify and price for the risks we want and to improve customer outcomes. And because we operate in attractive markets that are growing, this further allows us to be selective in the risks we choose to write. INVESTMENT STRATEGY Continuous improvements in our investment strategy to generate value for shareholders and better value for customers We invest in private placements, commercial property mortgages and infrastructure loans, as well as investment grade fixed income securities such as government and corporate bonds. We originate lifetime mortgages to provide matching cash flows for longer duration liabilities and to achieve a higher return than liquid financial assets. Read about our sustainable investment strategy on page 20.
The key characteristics of our business model:
SPECIALIST FOCUS
RISK SELECTION
PRODUCT INNOVATION
COST DISCIPLINE
FOCUS ON ORGANIC CAPITAL GENERATION
SCALABLE OPERATING MODEL
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