STRATEGIC REPORT
15
How we create value
Outcomes
Risk selection Selecting the right risks and pricing our products appropriately. PrognoSys™ is a powerful proprietary tool for pricing and reserving. It allows the Group to identify and price for the risks we want and improve customer outcomes.
Investors By managing our resources effectively we generate profits in excess of our cost of capital. We manage our capital conservatively and are focused on delivering capital self-sufficiency.
Customers
INDIVIDUALS We help our customers enjoy a better quality of life in retirement by making their savings and property wealth go further through medical underwriting. CORPORATE CLIENTS We solve problems for companies through scalable retirement focused solutions. TRUSTEES AND SCHEME SPONSORS We provide member security and de-risk pension liabilities.
Our products and services are distributed via our multi-channel model
investment Strategy Continuous improvements in our investment strategy to generate value for shareholders and better value for customers. The asset portfolio is selected to match the cash flows we pay to Retirement Income customers, seeking an appropriate balance between risk and expected return. Lifetime mortgages we originate are key in providing matching cash flows for longer durations and achieve a higher return than liquid financial assets. We also invest in private placements, commercial property mortgages and infrastructure loans, as well as investment grade fixed income securities such as government and corporate bonds.
Innovation Innovatively utilising funding and reinsurance tools to improve our capital position. This includes: • development of a capital light origination business via a new DB de-risking partnering model; • further reinsurance options on the front and back book; and • a pioneering no-negative equity guarantee risk transfer solution.
People We develop, recognise and reward our colleagues to secure a skilled and motivated team.
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