JUST GROUP PLC Annual Report and Accounts 2021
RISK MANAGEMENT
The Group’s enterprise-wide risk management strategy is to enable all colleagues to take more effective business decisions through a better understanding of risk.
RISK EVALUATION AND REPORTING We evaluate our principal and emerging risks and decide how best to manage themwithin our risk appetite. Management regularly reviews its risks and produces reports to provide assurance that material risks in the business are being appropriately mitigated. The Risk function, led by the Group Chief Risk Officer (“GCRO”), challenges the management team on the effectiveness of its risk evaluation and mitigation. The GCRO provides the Group Risk and Compliance Committee (“GRCC”) with his independent assessment of the principal and emerging risks to the business. Financial risk modelling is used to assess the amount of each risk type against our capital risk appetite. This modelling is principally aligned to our regulatory capital metrics. This modelling allows the Board to understand the risks included in the Solvency Capital Requirement (“SCR”) and how they translate into regulatory capital needs. By applying stress and scenario testing, we gain insights into how risks might impact the Group in different circumstances. The financial risks from climate change arise from property, longevity and market risks as set out on pages 25 to 28. The associated policies govern the exposure of the Group to a range of risks, including climate risk, and define the risk management activities to ensure these risks remain within appetite.
PURPOSE The Group risk management framework supports management in making decisions that balance the competing risks and rewards. This allows them to generate value for shareholders, deliver appropriate outcomes for customers and provide confidence to other stakeholders. Our risk management processes are designed to ensure that our understanding of risk underpins how we run the business. RISK FRAMEWORK Our risk framework, owned by the Board, covers all aspects involved in the successful management of risk, including governance, reporting and policies. Our appetite for different types of risk is embedded across the business to create a culture of confident risk-taking. The framework is continually developed to reflect our risk environment and emerging best practice. Over the past year it has been enhanced to facilitate the identification, assessment and reporting of risks arising from climate change (“climate risk”), with risk category definitions updated to integrate climate risk aspects. A high-level qualitative climate risk appetite has been added to the Group’s existing high-level appetites, which include reputation and capital, recognising the importance of climate risk. Group policies have been updated to draw out any climate specific considerations for risk management.
EMBEDDING GOVERNANCE VIA THREE LINES OF DEFENCE
1 st LINE
2 ND LINE
BUSINESS OPERATIONS The first level of the control environment is the business operations which perform day-to-day risk management activity.
OVERSIGHT FUNCTIONS Oversight functions in the Company, such as Risk Management, Compliance and Chief Actuary, support the Board in setting risk appetite and defining risk and compliance policy. RISK & CONTROL • Oversight of the risk and control environment • Independent challenge and reporting on the risk profile and conduct of the business • Monitoring actions being taken to mitigate risk
RISK & CONTROL • An established risk and control environment
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