JUST GROUP PLC Annual Report and Accounts 2019
24
Key Performance indicators
The Board has adopted the following metrics, which are considered to give an understanding of the Group’s underlying performance drivers. These measures are referred to as key performance indicators (“KPIs”)
The Board keeps KPIs under review to ensure they continue to reflect the Group’s priorities and strategic objectives. The focus of the Group’s strategic objectives has moved towards capital and capital generation, with a reduced focus on sales. In line with this change in focus, two of the Group’s KPIs have been updated. Economic capital has been replaced by organic capital generation/(consumption), and new business sales has been replaced by Retirement Income sales. These new KPIs are explained below.
SOLVENCY II CAPITAL COVERAGE RATIO 2 Solvency II capital is the regulatory capital measure and is focused on by the Board in capital planning and business planning. It expresses the regulatory view of the available capital as a percentage of the required capital.
Retirement income SALES 1 Retirement Income sales include DB, GIfL and Care premiums written and are a key measure of the Group’s performance in these core product areas. As noted above, this KPI has replaced new business sales. The new business sales KPI included LTM advances, which are a balance sheet rather than a revenue item. Retirement Income sales are reconciled to IFRS gross premiums in note 6 to the consolidated financial statements.
141 % (estimated)
1,918.1 m
£
141
2019
1,918.1
2019
136
2018
2018
2,173.5
139
2017
2017
1,889.9
0
30
60
90
120
150
0
500
1,000
1,500
2,000
2,500
Link to strategic objective 1. 2. 3. 4. 5.
Link to strategic objective 1. 2. 3. 4. 5.
Organic capital generation/ (consumption) 1,2
NEW BUSINESS OPERATING PROFIT 1 New business operating profit represents the profit generated from new business written in the year after allowing for the establishment of prudent reserves for future expected annuity payments and maintenance expenses and for acquisition expenses. Acquisition expenses include the commission and trading costs, plus overhead costs, associated with writing new business. New business operating profit is reconciled to IFRS profit before tax in the Financial Review.
Organic capital generation/(consumption) is the net increase/ (decrease) in Solvency II excess own funds over the year, excluding equity and debt capital changes, economic variances, accelerated TMTP amortisation, and the impact of regulatory changes. The Board believes that this measure provides a good view of the progress made towards achieving a sustainable capital model. As noted above, this KPI has replaced economic capital. Economic capital had become of decreasing relevance because it is not based on the regulatory capital position of the Group.
36 m
182.0 m
£
£
2019
182.0
36
2019
243.7
2018
(165)
2018
169.8
2017
0
50
100
150
200
250
-200
-160
-120
-80
-40
0
40
Link to strategic objective 1. 2. 3. 4. 5.
Link to strategic objective 1. 2. 3. 4. 5.
Powered by FlippingBook