Just Group announces £1.8bn DB de-risking deal

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."

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

JUST GROUP PLC

GROUP COMMUNICATIONS

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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.