Strategic Report | Governance | Financial Statements | 213
34. FINANCIAL AND INSURANCE RISK MANAGEMENT continued Interest is payable on any drawdown loans at a rate of SONIA plus a margin of between 1.00% and 2.75% per annum depending on the Group’s ratio of net debt to net assets. The table below summarises the maturity profile of the financial liabilities, including both principal and interest payments, of the Group based on remaining undiscounted contractual obligations:
Within one year or payable on demand £m
One to five years £m
Five to ten years £m
Over ten years £m
Total £m
2023
7
38
–
– –
45
Investment contract liabilities
47
598
285
930
Subordinated debt
1,463 2,178
4,273
5,725
17,642
29,103
Derivative financial liabilities
478
–
–
2,656
Repurchase obligation
Obligations for repayment of cash collateral received
532
– –
– –
– –
532
11
11
Other payables (excluding lease liability)
Within one year or payable on demand £m
One to five years £m
Five to ten years £m
Over ten years £m
Total £m
2022 (restated)¹
Investment contract liabilities
8
31
–
1 –
40
Subordinated debt¹
49
495
465
1,009
Derivative financial liabilities¹ Obligations for repayment of cash collateral received
907
4,328
4,534
13,345
23,114
623
– –
– –
– –
623
Other payables (excluding lease liability)¹
87
87
1 2022 is restated on transition to IFRS 17. In addition subordinated debt is restated to exclude the Restricted Tier 1 equity instrument. Derivatives are restated to report the amounts on an undiscounted basis. Derivatives and other payables are restated to correct the treatment of future funding commitments as explained in note 1.2.2.
35. CAPITAL Group capital position The Group’s estimated capital surplus position at 31 December 2023 was as follows:
Solvency capital requirement
Minimum Group Solvency capital requirement
2023 1, 2 £m 3,104
2023 £m
2022 1, 2 £m 2,757
2022 2 £m
2,572 (462) 3 2,110 3 557% 3
Eligible own funds Capital requirement Excess own funds
2,152 (388) 1,764 555%
(1,577) 3 1,527 3 197% 3
(1,387)
1,370 199%
Solvency II Capital coverage ratio
1 Solvency II capital coverage ratios as at 31 December 2023 and 31 December 2022 include a formal recalculation of TMTP. 2 2023 regulatory position is estimated. 2022 regulatory position is reported as included in the Group’s Solvency and Financial Condition Report as at 31 December 2022. 3 Unaudited. Further information on the Group’s Solvency II position, including a reconciliation between the regulatory capital position to the reported capital surplus, is included in the Business review. This information is estimated and therefore subject to change. The Group and its regulated insurance subsidiaries are required to comply with the requirements established by the Solvency II Framework directive as adopted by the Prudential Regulation Authority (“PRA”) in the UK, and to measure and monitor its capital resources on this basis. The overriding objective of the Solvency II capital framework is to ensure there is sufficient capital within the insurance company to protect policyholders and meet their payments when due. They are required to maintain eligible capital, or “Own Funds”, in excess of the value of their Solvency Capital Requirements (“SCR”). The SCR represents the risk capital required to be set aside to absorb 1-in-200 year stress tests over the next one-year time horizon of each risk type that the Group is exposed to, including longevity risk, property risk, credit risk and interest rate risk. These risks are all aggregated with appropriate allowance for diversification benefits. The capital requirement for Just Group plc is calculated using a partial internal model. Just Retirement Limited (“JRL”) uses a full internal model and Partnership Life Assurance Company Limited (“PLACL”) capital is calculated using the standard formula. Group entities that are under supervisory regulation and are required to maintain a minimum level of regulatory capital are: • JRL and PLACL – authorised by the PRA, and regulated by the PRA and FCA. • HUB Financial Solutions Limited, Just Retirement Money Limited and Partnership Home Loans Limited – authorised and regulated by the FCA.
The Group and its regulated subsidiaries complied with their regulatory capital requirements throughout the year.
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