STRATEGIC REPORT
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I am pleased to introduce Just Group plc’s
We have established our own internal target that 33% of senior leadership roles should be held by women by the end of 2023. More detail on this theme can be found on page 55. I take great pride in leading the Board and the Group’s governance function, and my introduction to the Corporate Governance Report provides further information on our governance and decision making processes. I would like to thank the entire Board for their significant contribution, and look forward to working with them in 2020. ENGAGEMENT WITH OUR STAKEHOLDERS The Board engages directly and indirectly with our customers, shareholders, colleagues, regulators, legislators, professional bodies and wider society to promote the interests of our customers more broadly. We place great importance on working effectively with these groups and actively seeking their feedback. We work hard to ensure our customers benefit from our services and our shareholders receive the benefit of long-term value creation. Throughout this report you can read how the Board takes into consideration feedback from the Company’s stakeholders and how the Board and colleagues across the Group promote the success of the Company. OUR PURPOSE Just has a strong social purpose: we help people achieve a better later life by providing financial advice, guidance, competitive products and services. We help our customers achieve security, certainty and the peace of mind in retirement. OUTLOOK The fundamental drivers for growth in our core markets continue to be strong and whilst further progress needs to made on our capital position, the commercial outlook remains favourable for our Group. I remain confident that our disciplined participation in these markets will result in excellent outcomes for our customers and value creation for our shareholders. We have further work to do to address the regulatory challenges of the last few years, although we now have greater clarity and have taken significant steps to strengthen our capital base. Our results in the year demonstrate our proven expertise in selecting the most appropriate risks, combined with our focus on deploying our capital wisely. I want to emphasise the Board’s focus on reviewing all strategic and business options to maximise shareholder value. This can now be done from a position of increased regulatory clarity, greater capital certainty, and a valuable new business franchise, all under the leadership of a strengthened management team. On behalf of the Board I would like to close by thanking all of our colleagues across the Group for their hard work, creativity and dedication to our purpose. With their positive energy and commitment to providing the best service possible to our customers and business partners, we are building a stronger, Just company that can be increasingly optimistic about the future.
2019 Annual Report. We have strengthened the capital position of the Group and delivered an encouraging operating performance.
OUR PRIORITY IN 2019 In the 2018 Annual Report I set out the uncertainty presented to Just and other companies in the industry resulting from the Prudential Regulation Authority’s (“PRA”) consultation into the treatment of equity release mortgages. During 2019 the PRA published the second part of its conclusions on the treatment of equity release mortgages being held to back annuity liabilities. The impact has been significant, but I am pleased to report that it was in line with our planning assumptions. During the year we have made good progress implementing management actions in response to the regulatory changes. We have identified a range of further management actions to continue to maintain and strengthen the Group’s capital base as we finalise our compliance with the rules by the end of 2021. We continue to work closely with the PRA as we stabilise our capital position and reflect the regulatory changes in our capital models. In light of the changes in capital requirements, the Board has continued to actively review and adapt the Group’s business model to ensure that we can continue to provide products that are valuable for our customers, with appropriate levels of capital security and to ensure that we can deliver a good return for our shareholders. This has resulted in targeted reductions in new business, changes to product pricing and re-insurance that have successfully halved new business strain in 2019. The Board’s focus on this will continue in 2020. Delivering capital self-sufficiency is without question our principal commitment to shareholders, because it signals the on-going rigour of our capital management and will deliver a sustainable business. This is why the Board has instigated a less capital intensive strategy. The Group’s financial strength and performance is explained in detail in the Financial Review. DIVIDEND Whilst the Group continues to build its capital base to accommodate the new regulations on equity release mortgages, the Board believes it would not be appropriate to recommend recommencing dividend payments. The Board will continue to keep this situation under review. Chief Executive Officer. I would like to take this opportunity to thank him again for leading the Group through a period of significant change over the past nine years. In September we announced that, following an extensive search, David Richardson (formerly Deputy Chief Executive Officer) had been appointed as the Company’s new Chief Executive Officer. David’s leadership is already transforming the Group, and making his interim CEO role permanent was a natural step for us to take. In June we announced that Andy Parsons would be joining as the Group’s new Chief Financial Officer. Andy was appointed to the Board and started his new role on 1 January. Michelle Cracknell joined the Group Board on 1 March 2020 and Mary Kerrigan joined the Boards of Just Retirement Limited and Partnership Life Assurance Company Limited, the Group’s life insurance subsidiaries on 1 November 2019. I am delighted to welcome all three of them to the Group. It was with great sadness we announced that Michael Deakin passed away in July. Michael made an invaluable contribution in his role as a Non-Executive Director of the Company and Chair of the Investment Committees for the Group’s life insurance subsidiaries and will be greatly missed. The Board remains committed to achieving the Hampton–Alexander targets and improving diversity in the boardroom. The appointments of Michelle and Mary demonstrate our progress towards this goal. BOARD COMPOSITION AND GOVERNANCE In April we announced that Rodney Cook would be retiring as
chris gibson-smith Chair
ANNUAL GENERAL MEETING 2020 10.00 am 14 May 2020
at Just Group plc Enterprise House Bancroft Road Reigate Surrey RH2 7RT
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