REG - Just Group plc - Just Group announces £1.8bn DB de-risking deal

JustAnnouncement

14/11/2024 09:00

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RNS Number : 1591M  Just Group PLC  14 November 2024

 

                www.justgroupplc.co.uk

 NEWS RELEASE

 

14 November 2024

 

Just Group announces £1.8bn defined benefit de-risking transaction

 

Just Group plc ("Just", the "Group") announces a £1.8bn transaction to secure
all pension benefits of the G4S Pension Scheme.

 

Highlights of the transaction

Just has completed its largest defined benefit de-risking transaction to date;
a £1.8 billion full buy-in with the Trustee of the G4S Pension Scheme,
covering the benefits of c.22,500 pensioner and deferred members.  The
Trustee selected Just Group following a competitive and rigorous selection
process.

Financial details

Utilising our DB Partner (funded reinsurance) proposition, Just is reinsuring
60%, or £1.1bn, of the investment and longevity risks of the transaction.
Just Group has entered into the funded reinsurance portion of the transaction
with a subsidiary of Brookfield Wealth Solutions, a leading wealth and
retirement company with over $110 billion of assets. The transaction is
expected to close in the coming weeks, subject to customary regulatory
approvals in the U.S.

Just is retaining 40%, or £0.7bn, which represents the shareholder funded
portion of the transaction. This amount is consistent with, and does not
alter, the guidance that was given at the time of the H1 24 results, whereby
we expected that H2 24 shareholder funded new business volumes would be
similar to the excellent performance achieved in H1 24 (£2.5bn), albeit with
slightly lower margins due to business mix.

David Richardson, Group Chief Executive, said:

"We have exciting growth opportunities across both our DB and retail
businesses. This transaction, our first above £1bn, demonstrates that we have
all the capabilities in place to deliver de-risking solutions across the DB
market. There is a vibrant insurance de-risking market for schemes of all
sizes and Just are delivering outstanding service to small and large schemes
and everything in between.

We continue to view funded reinsurance as complementary to our existing
business. Our use has always been selective, with a combined c.£2bn of funded
reinsurance across four transactions to date, representing less than 10% of
our total annuity liabilities, each with a different counterparty.

As announced at the interim results in August, for FY 2024 we expect to
substantially exceed a doubling of the Group's 2021 £211m operating profit."

Pretty Sagoo, Managing Director for Defined Benefits Solutions, said:

"We are delighted to have been selected by the Trustee to secure the Scheme
members' benefits, and we look forward to providing a brilliant member
experience for many years to come. This demonstrates our ability to support
larger schemes in their de-risking journeys.  We are also very pleased to
have selected American National Insurance Company, a wholly owned subsidiary
of Brookfield Wealth Solutions, as our reinsurance partner. American National
has a decades-long history of financial strength (A rated) and excellent
customer service."

 

 

 Enquiries

 Investors / Analysts                 Media

 Alistair Smith, Investor Relations   Stephen Lowe, Group Communications Director

 Telephone: +44 (0) 1737 232 792      Telephone: +44 (0) 1737 827 301

 alistair.smith@wearejust.co.uk       press.office@wearejust.co.uk

 Paul Kelly, Investor Relations       Temple Bar Advisory

 Telephone: +44 (0) 20 7444 8127      Alex Child-Villiers, Sam Livingstone

 paul.kelly@wearejust.co.uk

                                      Telephone: +44 (0) 20 7183 1190

                                      just@templebaradvisory.com

 

A copy of this announcement will be available on the Group's website
www.justgroupplc.co.uk

 

JUST GROUP PLC

GROUP COMMUNICATIONS

Enterprise House

Bancroft Road

Reigate

Surrey RH2 7RP

 

CAUTIONARY STATEMENT AND FORWARD-LOOKING STATEMENTS

This announcement has been prepared for, and only for, the members of Just
Group plc (the "Company") as a body, and for no other persons. The Company,
its Directors, employees, agents and advisers do not accept or assume
responsibility to any other person to whom this document is shown or into
whose hands it may come, and any such responsibility or liability is expressly
disclaimed.

By their nature, the statements concerning the risks and uncertainties facing
the Company and its subsidiaries (the "Group") in this announcement involve
uncertainty since future events and circumstances can cause results and
developments to differ materially from those anticipated. This announcement
contains, and we may make other statements (verbal or otherwise) containing,
forward-looking statements in relation to the current plans, goals and
expectations of the Group relating to its or their future financial condition,
performance, results, strategy and/or objectives (including, without
limitation, climate-related plans and goals). Statements containing the words:
'believes', 'intends', 'expects', 'plans', 'seeks', 'targets', 'continues',
'future', 'outlook', 'potential' and 'anticipates' or other words of similar
meaning are forward-looking (although their absence does not mean that a
statement is not forward-looking). Forward-looking statements involve risk and
uncertainty because they are based on information available at the time they
are made, based on assumptions and assessments made by the Company in light of
its experience and its perception of historical trends, current conditions,
future developments and other factors which the Company believes are
appropriate and relate to future events and depend on circumstances which may
be or are beyond the Group's control. For example, certain insurance risk
disclosures are dependent on the Group's choices about assumptions and models,
which by their nature are estimates. As such, although the Group believes its
expectations are based on reasonable assumptions, actual future gains and
losses could differ materially from those that we have estimated. Other
factors which could cause actual results to differ materially from those
estimated by forward-looking statements include, but are not limited to:
domestic and global political, economic and business conditions (such as the
longer-term impact from the COVID-19 outbreak or the impact of other
infectious diseases, climate change, the conflict in the Middle East, and the
continuing situation in Ukraine); asset prices; market-related risks such as
fluctuations in interest rates and exchange rates, and the performance of
financial markets generally; the policies and actions of governmental and/or
regulatory authorities including, for example, new government initiatives
related to the provision of retirement benefits or the costs of social care or
the transition to net-zero; the impact of inflation and deflation; market
competition; failure to efficiently and effectively respond to climate change
related risks and the transition to a net zero economy; changes in assumptions
in pricing and reserving for insurance business (particularly with regard to
mortality and morbidity trends, gender pricing and lapse rates); risks
associated with arrangements with third parties, including joint ventures and
distribution partners and the timing, impact and other uncertainties
associated with future acquisitions, disposals or other corporate activity
undertaken by the Group and/or within relevant industries; inability of
reinsurers to meet obligations or unavailability of reinsurance coverage;
default of counterparties; information technology or data security breaches
including cybersecurity threats and the rapid pace of technological change;
the impact of changes in capital, solvency or accounting standards; and tax
and other legislation and regulations in the jurisdictions in which the Group
operates (including changes in the regulatory capital requirements which the
Company and its subsidiaries are subject to). As a result, the Group's actual
future financial condition, performance and results may differ materially from
the plans, goals and expectations set out in the forward-looking statements.
The forward-looking statements only speak as at the date of this document and
reflect knowledge and information available at the date of preparation of this
announcement. The Group undertakes no obligation to update these
forward-looking statements or any other forward-looking statement it may make
(whether as a result of new information, future events or otherwise), except
as may be required by law. Persons receiving this announcement should not
place undue reliance on forward-looking statements. Past performance is not an
indicator of future results. The results of the Company and the Group in this
announcement may not be indicative, and are not an estimate, forecast or
projection of, the Group's future results. Nothing in this announcement should
be construed as a profit forecast.

 

 

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