STRATEGIC REPORT
37
STRATEGIC OBJECTIVES
RISK OUTLOOK
No Change/Stable Increasing Decreasing
1.
2.
3.
4.
5.
IMPROVE OUR CAPITAL POSITION
TRANSFORM HOW WE WORK
GET CLOSER TO OUR CUSTOMERS & PARTNERS
GENERATE GROWTH IN NEW MARKETS
BE PROUD TO WORK AT JUST
DESCRIPTION AND IMPACT
MITIGATION AND MANAGEMENT ACTION
RISK
The Group operates in a market where changes in pensions legislation can have a considerable effect on our strategy and could reduce our sales and profitability or require us to hold more capital. Markets have been disrupted by the COVID-19 pandemic; the full market impact will not be fully clear for some time. Investment volatility has emphasised the benefit of a secure income in retirement for customers and the Group expects that demand for Guaranteed Income for Life solutions will continue. The defined benefit de-risking market is expected to continue to grow strongly. The equity release market has been dominated by a limited number of specialist providers, but new entrants – both providers and funders – have emerged along with new product launches. The market was significantly disrupted by the COVID-19 pandemic; providers, distributors, solicitors, conveyancers and valuers have adapted processes to continue to serve customers safely. House price growth observed in the second half of 2020 is expected to slow in 2021, which may impact appetite for equity release. Customer needs and expectations continue to evolve and change in profile, and there is a risk that we fail to customise and tailor our professional services and distribution models to suit their specific requirements. Poor management of customer or distributor relationships as well as misleading customers or misrepresenting products to customers are also risks which could lead to regulatory censure as well as loss of customers. Our purpose is to help people achieve a better later life. Our Group’s brands reflect the way we intend to conduct our business and treat our customers and wider stakeholder groups. The Group’s reputation could be damaged if the Group is perceived to be acting, even unintentionally, below the standards we set for ourselves. This could include, for example, failing to achieve the goals we have set for enhancing our sustainability framework. Additionally, the Group’s reputation could be threatened by external risks such as a cyber-attack or regulatory intervention or enforcement action, either directly or as a result of contagion from other companies in the sectors in which we operate. Damage to our reputation may adversely affect our underlying profitability, through reducing sales volumes, restricting access to distribution channels and attracting increased regulatory scrutiny.
Our approach to legislative change is to participate actively and engage with policymakers. The Group offers a range of retirement options, allowing it to remain agile in this changing environment, and has flexed its offerings in response to market dynamics. We believe we are well placed to adapt to changing customer demand, supported by our brand promise, innovation credentials and financial strength. The most influential factors in the successful delivery of the Group’s plans are closely monitored to help inform the business. The factors include market forecasts and market share, supported by insights into customer and competitor behaviour. Work continues to improve the customer appeal of the Group’s equity release products, explore new product variants and meet distributors’ digital and service needs. We continue to review and enhance our services to ensure they remain fully compliant, demonstrate best practices and deliver good customer outcomes. During the COVID-19 pandemic, all services were quick to adapt and continued to provide customers with products and services in our chosen markets. Any required operational changes received rigorous review ahead of implementation to ensure robust customer controls remained. At the start of 2020 we launched a new, pioneering and exciting fully advised online financial planning service, “Destination Retirement”, targeted at people close to or in retirement with modest pension savings. The service provides the opportunity to receive tailor-made regulated financial advice without paying the costs associated with a traditional financial adviser. Following this launch, we successfully joined the FCA’s regulatory sandbox as part of our on-going close engagement with the regulator. The defined benefit pension transfer advice market has remained under close regulatory scrutiny through the year. We continue to operate in this market, demonstrating the high advice standards expected. The Group actively seeks to differentiate its business from competitors by investing in brand-enhancing activities. Fairness to customers and high service standards are at the heart of the Just brand, and we encourage our colleagues to take pride in the quality of service they provide. Engaging our colleagues in the Just brand and its associated values has been, and remains, a critical part of our internal activity. Just is proactive in pursuing its sustainability responsibilities and recognises the importance of its social purpose. The Group maintains a system of internal control, and associated policies and operational procedures, which define the standards we expect of all colleagues.
RISK E RISKS FROM OUR CHOSEN MARKET ENVIRONMENT
Strategic objective
2. 3. 4. 5. 1.
Change in the year
Risk outlook
RISK F RISKS TO THE
GROUP’S BRAND AND REPUTATION
Strategic objective
2. 3. 4. 5. 1.
Change in the year
Risk outlook
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