JUST GROUP PLC Annual Report and Accounts 2019
28
financial review continued
Post year end actions The chart below shows the impact on the Group’s solvency position from actions since 31 December 2019. Adjustments since 31 December 2019 relate to calling the remaining £63m 9.5% PLACL Tier 2 debt, which will take place on 24 March 2020, and from the new no-negative equity guarantee (“NNEG”) hedge and the DB partnering deals entered into since year-end.
4%
141%
(3%)
142%
Reported 31 December 2019
PLACL debt call
Actual after post year-end adjustments
Management actions since 31 December 2019
Sensitivities to economic and other key metrics are shown in the table below. Estimated Group Solvency II sensitivities
Unaudited
%
£m
Solvency coverage ratio/excess own funds at 31 December 2019
141
748
-50 bps fall in interest rates +100 bps credit spreads +10% LTM early redemption
(3)
5
1 2
10 21
(15) (10)
(256) (183)
-10% property values 1
-5% mortality
1 Pro forma after application of NNEG reinsurance.
The property sensitivity has reduced to 15% (2018: 17%) following the LTM notes restructuring and reflecting the impact of NNEG hedging. The Group aims to minimise its sensitivity to interest rates through the active use of hedges. For more significant movements some exposure remains. The interest rate and property sensitivities allow for a partial offset from a notional TMTP recalculation. Reconciliation of IFRS shareholders’ net equity to Solvency II own funds
retirement income sales 1 1,918.1 m 2018: £2,173.5m, down 12% £
31 December 2019 £m
31 December 20181 £m
adjusted operating profit before tax 1
Unaudited
Shareholders’ net equity on IFRS basis
2,321
1,664
218.6 m
(34)
Goodwill
(34)
£
(120) (873)
Intangibles
(137) (851)
Solvency II risk margin
2018: £210.3m, up 4%
1,891
Solvency II TMTP
1,738
Other valuation differences and impact on deferred tax
ifrs profit before tax
(1,271)
(793)
368.6 m
(35)
Ineligible items
(6)
£
684
Subordinated debt Group adjustments Solvency II own funds
590
(1)
1
2018: £(85.5)m
2,562
2,172
1 Alternative performance measure.
Solvency II SCR
(1,814)
(1,595)
Solvency II excess own funds
748
577
1 These figures allow for a notional recalculation of TMTP as at 31 December 2018.
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