JUST GROUP PLC Annual Report and Accounts 2019
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strategic priorities
1.
In 2019, capital has been the Group’s number one priority
IMPROVE OUR CAPITAL POSITION
Our purpose is crystal clear. We help people achieve a better later life. Every colleague across the Group contributes to this purpose, whether they are serving the customer or providing support to someone who is
FOCUS We need to deliver a sustainable capital model to maximise opportunities available to us.
2019 PROGRESS • Pricing actions and controlling new business volumes have contributed to a significant reduction in new business strain. • We have improved our capital efficiency through originating a greater proportion of shorter-dated GIfL policies, helping customers with more severe medical conditions, and through focusing on shorter duration Lifetime Mortgage loans to older borrowers and lower LTV business. • In August, we increased the amount of longevity reinsurance from 70% to 100% on our existing post-Solvency II DB de-risking business. • We will reinsure 90% of longevity risk on future DB de-risking new business. • Positive organic capital generation of £36m in 2019. • We have made progress towards meeting regulatory capital changes for LTMs and have restructured our internal LTM securitisation to meet revised regulatory requirements, a cost of £219m in 2019 with the remaining cost of fully implementing the regulatory requirements for LTMs estimated to be £80m. • Capital raised during the year benefited capital resources by a net amount of £452m. 2020 FOCUS • We will make progress on organic capital generation. • Continue to de-risk our balance sheet to reflect economic and regulatory challenges.
The regulatory changes introduced by the PRA during 2018 and 2019 in relation to equity release mortgages have had a significant impact on the Group’s capital position. In response to the changes the Group raised new equity and debt capital over 2019 as well as completing management actions to de-risk the balance sheet and restructuring the Group’s new business to be less capital intensive. The progress we have made in facing up to these challenges is testament to our colleagues’ adaptability and dynamism. The changing regulatory environment means we continue to be focused on capital management, which should both improve policyholder security and reduce risk. We are also reviewing other strategic and business options to enhance shareholder value.
Principal risks and uncertainties
A Risks from regulatory changes B Risks from the economic environment C Risks from our pricing assumptions D Risks arising from operational processes and IT systems
E Risks from our chosen market environment f Risks to the Group’s brands and reputation
Link to risks and uncertainties:
a b c d e f
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