NEWS RELEASE			www.justgroupplc.co.uk
7 March 2025
JUST GROUP PLC RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024 SIGNIFICANTLY EXCEEDING TARGETS & BUILDING FOR THE FUTURE

Just Group plc (the "Group", "Just") announces its results for the year ended 31 December 2024.

David Richardson, Group Chief Executive Officer, said:

"We made a pledge three years ago to double profits over five years. We have significantly exceeded that target in just three years and created substantial shareholder value as a result.

Our markets remain buoyant and we are confident in our ability to grow earnings at an attractive rate from this significantly higher level. We remain committed to compounding further growth in shareholder value.

I'd like to thank my talented colleagues who are consistently delivering excellent results and helping a broader range of customers. With a clear purpose and vision, together we're shaping a brighter future for Just."

Profitable and sustainable growth

·	Underlying operating profit1 up 34% to £504m (FY 23: £377m), driven by new business sales growth, higher recurring in-force profit and increased scale.
·	Retirement Income sales1 have grown by 36% to £5.3bn (FY 23: £3.9bn). New business margins were slightly lower at 8.7% (FY 23: 9.1%), principally driven by business mix. These combined to drive a 30% increase in new business profits to £460m (FY 23: £355m).

Strong Solvency II and IFRS

·	Capital coverage ratio is a robust and resilient 204%2 proforma (31 December 2023: 197%2). The interest rate and residential property sensitivities have further reduced through the cumulative effect of management actions, and as we increasingly diversify the investment portfolio.
·	New business strain1 at 1.3% (FY 23: 0.9%) is once again well inside our target of below 2.5% of premium. Cash generation before new business strain is higher at £119m (FY 23: £111m).  Our sustainable growth is driven by a low capital intensity new business model, further augmented by management actions and availability of surplus capital.
·	Adjusted profit before tax1 was £482m (FY 23: £520m), as strong underlying profit was offset by lower non-operating items. Of this £482m, £369m of profit is deferred to the CSM3 , leaving an IFRS profit before tax of £113m (FY 23: £172m).

Delivering shareholder value

·	Improved return on equity1 to 15.3% and tangible net assets per share1 to 254p (FY 23: 13.5% and 31 December 2023: 224p respectively). This is a rapidly growing store of long-term value.
·	Dividend of 2.5p per share, 20% growth driven by confidence in the strong fundamentals and future prospects of the business.

 

Notes

¹     Alternative performance measure ("APM") - In addition to statutory IFRS performance measures, the Group has presented a number of non-statutory alternative performance measures. The Board believes that the APMs used give a more representative view of the underlying performance of the Group. APMs are identified in the glossary at the end of this announcement and reconciled to IFRS measures in the Business Review.

²        Solvency capital coverage ratios as at 31 December 2024 and 31 December 2023 include a recalculation of transitional measures on technical provisions ("TMTP") as at the respective dates. The estimated 2024 ratio is presented after the impact of the pre-funded repayment of Tier 3 debt in February 2025.

³        Contractual Service Margin.

 

Enquiries   Investors / Analysts   Alistair Smith, Investor Relations Telephone: +44 (0) 1737 232 792 [email protected]   Paul Kelly, Investor Relations Telephone: +44 (0) 20 7444 8127 [email protected]

Media   Stephen Lowe, Group Communications Director Telephone: +44 (0) 1737 827 301 [email protected]   Temple Bar Advisory Alex Child-Villiers, Sam Livingstone Telephone: +44 (0) 20 7183 1190 [email protected]

 

For analysts and investors who have registered, a presentation will take place today at 1 Angel Lane, London, EC4R 3AB, commencing at 09:30 am. The presentation will also be available via a live webcast.

 

FINANCIAL CALENDAR	DATE
Ex-dividend date for final dividend	10 April 2025
Record date for final dividend	11 April 2025
Payment of final dividend	14 May 2025

A copy of this announcement, the presentation slides and the transcript will be available on the Group's website www.justgroupplc.co.uk.

 

Click on, or paste the following link into your web browser, to view a PDF of this announcement: http://www.rns-pdf.londonstockexchange.com/rns/7327Z_1-2025-3-6.pdf

Click on, or paste the following link into your web browser, to view the Annual Report and Accounts for the year ending 31 December 2024: http://www.rns-pdf.londonstockexchange.com/rns/7327Z_2-2025-3-6.pdf

 

The Full Year Results and Annual Report and Accounts will be available shortly on the Just Group website at https://www.justgroupplc.co.uk/investors/results-reports-and-presentations and both documents have been submitted in full unedited text to the Financial Conduct Authority's National Storage Mechanism and will be available shortly for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

 

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 inheritance tax or the costs of social care or climate action, particularly the transition to net zero); the impact of inflation and deflation on both market conditions and customer behaviours; 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 (including the role of artificial intelligence and machine learning); 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. 

 

Chief executive officer's statement

Buoyant markets and strong GROWTH.

"With a clear purpose and vision, we're shaping a future that's not just bigger and better - but brighter."

Our underlying operating profit has grown by 34% to £504m, driven by very strong growth in shareholder funded sales, up 36% to £5.3bn. Our DB and retail businesses contributed to this excellent performance, and both are operating in markets that are benefitting from long-term structural growth drivers. We are committed to compounding the growth in value of the business. During 2024, we have delivered 36.3p of underlying earnings per share and increased the Group's tangible net asset value by 30p to 254p per share.

Defined Benefit De-risking business (shareholder funded) sales up 43%, total DB sales up 57%

Our DB business generated another record year of transactions, with total sales up 57% to £5.4bn. This total includes our largest transaction to date, a £1.8bn full Buy-in with the Trustee of the G4S Pension Scheme, covering the benefits of c.22,500 pensioner and deferred members. This transaction, our first above £1bn, demonstrates that we have all the capabilities in place to deliver de-risking solutions across the DB market.

During 2024, we completed 129 transactions, a significant increase on the 80 we completed in 2023 and more than double the 56 completed in 2022. This number is a record year for any company in the history of the DB market as we completed over one third of the total market transactions. We have used technology to meet growing market demand and use of our bulk quotation and price monitoring service, Beacon, continues to increase. It is now being used by all major employee benefit consultants and Beacon has the capacity to provide services to every DB pension scheme in the UK.

Pension scheme de-risking is helping to support growth in the UK economy by enabling UK corporates to focus on growing their businesses and by investing the assets in productive finance.

Guaranteed Income for Life sales up 16%

After a very strong return to growth in 2023, I am delighted that our retail business has shown further excellent progress in 2024, with GIfL sales up 16% to £1.0bn. Market demand has been strong as the appetite of advisers to lock-in security for their clients continues to grow. Strong consumer demand is also evidenced by the activity levels in our GIfL broking business, the largest in the UK. The number of advisers sourcing quotes from Just has increased rapidly over the last two years and continues to provide increased opportunities to utilise our medical underwriting intellectual property to select the most attractive risks.

SCALABILITY OF OUR investments CAPABILITY

Our successful illiquid origination strategy enabled us to source £2.4bn of illiquid investments during 2024, a 40% increase year on year, at attractive spreads above equivalent public assets. We are continuing to broaden our capabilities, with £1.0bn of this total sourced internally by our expanded Investments team, in addition to £0.3bn of funded lifetime mortgages via our retail business. Our illiquid investments in 2024 included social housing, infrastructure and private placements.

Our purpose and our customers

We help people achieve a better later life, that's our purpose and why we exist. We fulfil that purpose by delivering market-leading products and award-winning services to our customers. In 2024, more than 90,000 people became new customers of one of our businesses. We are now in a privileged position to be helping record numbers of customers, and we are investing to explore how we can help more people, with unmet needs, across the wider retirement markets.

Sustainability

We are committed to a sustainable strategy that protects our communities and the planet we live on. The most material impact we can make to reduce carbon emissions is through the decisions we take with our £27bn investments portfolio, which accounts for over 99% of our carbon footprint. Compared to our 2019 baseline, we have now reduced these emissions by 36%, which is excellent progress on our journey to achieving our net zero target.

Our people

We are harnessing the power of our highly talented, ambitious and engaged colleagues to deliver strong business growth and fulfil our purpose. Our focus is on ensuring we have the right capabilities for today and the future, delivering an exceptional colleague experience and enhancing the skills of our people managers.

I am very pleased we've made excellent progress in two key focus areas. Our colleague engagement score has continued to increase and is now 8.3 (2023: 7.9). We have exceeded our 2026 target, two years early, to increase the number of females in senior positions to 40%.

I would like to thank all my colleagues for their significant efforts in providing outstanding support to our customers - directly and indirectly - and delivering these excellent results. It's always a team effort and my colleagues make Just a brilliant place to work.

Financial performance, underlying operating profits up 34%

In 2024, underlying operating profit is up 34% to £504m, driven by strong new business performance further augmented by robust growth in recurring in-force profit, which combine to deliver a 15.3% return on equity. We incurred operating experience variances, the cost of strengthening the maintenance expense assumption, together with strategic costs as we invest to develop new propositions. These were partially offset by investment and economic profits and adjustments for items accounted for in equity, resulting in an adjusted profit before tax of £481m for 2024 (2023: £520m). After allowing for deferral of profit into the CSM balance sheet reserve, the IFRS profit before tax is £113m (2023: £172m). Our disciplined approach to risk selection means we can fund our growth ambitions from our own resources, maintain a strong buffer of capital and reward shareholders with a growing dividend.

We will pay a final dividend of 1.8 pence per share, giving a total of 2.5 pence for the year, representing 20% year-on-year growth.

In conclusion

Over the last three years underlying operating profit has more than doubled as we successfully executed our strategy. We are confident in our ability to grow at attractive rates from this elevated level. We have multiple opportunities available and structural growth in our chosen markets. Our DB and retail businesses are both contributing to our excellent performance, reflecting our continuing investment in technology and talent. We have a growth mindset, and we've developed a winning formula - one which will ensure we fulfil our purpose, to help people achieve a better later life. This formula is delivering sustained growth in the value of the business. With a clear purpose and vision, we're shaping a future that's not just bigger and better-but brighter.

DAVID RICHARDSON

Group Chief Executive Officer

 

Business Review

DELIVERING COMPOUNDING GROWTH.

"Our robust capital position and reduced sensitivities to market and other risks enable us to sustainably fund our ambitious growth plans from our own means."

We innovate, risk select and price with discipline, ensuring our business model delivers long-term value for customers and shareholders. The Business Review presents the results of the Group for the year ended 31 December 2024, including IFRS and Solvency II ("SII") information.

The continued growth and success of the business is built on the foundation of our low capital intensity new-business model, supported by a strong and resilient capital base. In line with our investment strategy, we continue to diversify the asset portfolio by originating a wide variety of high quality investments. We remain focused on cost control across the business whilst specifically targeting investment in systems and people to enable the business to scale efficiently. As we innovate and further broaden our growth strategy, increased product development investment will be aligned to our purpose to help people achieve a better later life through the before, at, and in-retirement phases of life.

SALES

During 2024, total retirement income sales grew 49% to £6.4bn (2023: £4.3bn), driven by continued strong momentum in both shareholder funded DB (up 43% to £4.3bn) and GIfL (up 16% to £1.0bn), further augmented by £1.1bn of DB Partner (funded reinsurance).

Since the beginning of 2022, rising interest rates have accelerated the closure of, and in most cases eliminated, DB pension scheme funding gaps. During 2024, we wrote a record amount of DB new business, up 57% to £5,376m from 129 transactions (2023: £3,415m from 80 transactions). Our consistent high level of activity translates into over one third of all market transactions that have occurred over the past three years. Prior investment in our proposition and early positioning enabled Just to take advantage of the strong market demand as rates rose. In November 2024, Just announced that it had completed its largest transaction to date, a £1.8bn deal with the G4S pension scheme. This complex, multi-faceted transaction demonstrated our structuring and operational capabilities, with Just now actively quoting and participating in the large transaction segment (£1bn+), in addition to being a major participant in the up to £1bn transaction size part of the market. Combined, this translated into an 11% market share by value of a £47bn DB market in 2024 (source: ABI, Just analysis). We expect the strong momentum in all segments to continue in 2025 and beyond, with multiple small, medium and large opportunities available as corporates of all sizes choose to offload legacy and complex DB pension risk to insurers. Despite record market volumes in recent years, we estimate that only c.20% of the £1.1tn DB market opportunity has transferred across to insurers thus far. In October 2024, LCP¹ re-affirmed their forecast that £400-600bn of DB Buy-in/Buy-out transactions could transact over the decade to 2033, of which c.£300bn could transact in the first five years (2024 to 2028 inclusive). The forecasts demonstrate the growth opportunity available to drive material increases in shareholder value.

Our Retail business also had a strong 2024, as the market continues to benefit from higher and more normalised long-term interest rates, which directly increase the GIfL customer rate on offer. This increases the attractiveness of a guaranteed income relative to other forms of retirement income. The customer rate can be further improved through bespoke medical underwriting, in which Just is a market leader. During 2024, we continued to maintain pricing discipline and selectively wrote £1,033m of GIfL/Care new business, up 16% (2023: £894m), in a buoyant market.

Our market insight allowed us to tactically choose the most profitable risks and allocate the available capital budget to those opportunities. Furthermore, the introduction of the FCA's Consumer Duty and findings from the FCA's thematic review into retirement income advice, are leading to increased adviser conversations on the importance of considering guaranteed solutions to help customers achieve their objectives. Regulatory pressure, technology tools and consolidation into larger advice networks are driving new trends in distribution, as advisers respond to the changing needs of their customers as they decumulate in the spending phase of retirement. We see a multi-decade opportunity as an increasing proportion of the population reach retirement age with larger pension pots, driven by auto-enrolment.

1    LCP: "Reaching cruising altitude" - October 2024

PROFIT

In 2024, underlying operating profit was £504m (2023: £377m), up 34%, thereby significantly exceeding guidance of doubling 2021's £211m underlying operating profit over five years, achieving the target in three years instead.

Prior investment, market insight and strong demand for our products enabled us to write high volumes of new business at an efficient capital strain. Shareholder funded Retirement Income sales at £5,308m, were 36% higher (2023: £3,893m). New business profit was up 30% at £460m (2023: £355m), translating to a new business margin of 8.7% (2023: 9.1%) on shareholder funded premiums. As expected, new business margin was a little lower and reverted to its medium term average due to business mix and tighter credit spreads compared to the prior year, where we had outperformed. Buoyant markets in both of our business lines supported active risk selection, and we are increasingly benefiting from operational gearing and systems investment. Growth of the in-force book of business together with continued higher and more normalised interest rates during 2024 boosted the return on surplus assets, thereby increasing in-force operating profit, up 24% to £236m (2023: £191m). Finance costs were stable at £69m, and we invested £25m (2023: £17m) in development expenditure regarding new systems and processes to scale the business efficiently for the future. We delivered a 15.3% Return on equity and underlying earnings per share of 36p (2023: 13.5% and 28p respectively).

We incurred negative operating experience, the cost of strengthening the maintenance expense basis, together with strategic costs as we invest to develop new customer propositions. These were partially offset by investment and economic profits and adjustments for items accounted for in equity, resulting in an adjusted profit before tax of £482m (2023: £520m). After allowing for the deferral of profit into the CSM balance sheet reserve, the IFRS profit before tax is £113m (2023: £172m). This decrease primarily reflects lower positive investment and economic variances of £18m (2023: £92m) primarily due to lower asset trading and other variances, and a smaller decrease in credit spreads in 2024 compared to 2023.

INCREASING SHAREHOLDER VALUE

Buoyant markets in both of our business lines drive volumes, which combined with Just's strong pricing discipline, market insight and business mix determine the new business margin, and therefore the shareholder value we create through new business. In addition, we prudently reserve for credit default and other risks, and release the excess provisions and profits earned as the existing book of business unwinds, together with the return earned on surplus assets into in-force profits.

Each year, the upfront profit delivered from new business increases the Contractual Service Margin ("CSM") reserve, offset by the profits earned as we pay the customer pensions due on business written in prior years. Our CSM store of value (post-tax) grows strongly as the volume of new business added each year far outweighs the amount of customer payments. When added to equity attributable to shareholders (excluding intangible assets), Just's Adjusted Equity or Tangible Net Assets is 254p per share (31 December 2023: 224p per share), on which we are earning a 15.3% return (2023: 13.5%), greater than our 12% Return on Equity target. The internal rate of return ("IRR") on shareholder capital invested in new business remains above our "mid-teen" target, as available capital is tactically allocated to exploit the opportunities available - both today and in the future.

CAPITAL

The Group's estimated Solvency II capital coverage ratio has increased to 204%³ (31 December 2023: 197%) as the capital position benefited from management actions and rising interest rates. In-force surplus after TMTP amortisation was up 6% to £178m (2023: £168m), and over the medium term is expected to grow in line with asset growth. Underlying organic capital generation ("UOCG") was £23m (2023: £57m), as we continue to invest the majority of cash generation into funding new business growth. Within this, the £71m capital strain from writing the increased level of new business was 1.3% of premium (2023: £35m and 0.9% of premium), well within our target of 2.5% of premium and ahead of the 1.5% average over the past five years. This low new business strain reflects continued strong pricing discipline, focused risk selection and our ability to originate increasing quantities of high-quality illiquid assets. Management actions and other items contributed a further £58m (2023 £69m), leading to £81m of organic capital generation (2023: £126m). In 2024, we paid a £23m shareholder dividend. We continue to closely monitor and prudently manage our risks, including interest rates, inflation, currency, residential property and credit. The Solvency II sensitivities are set out in the Capital Management section of the Business Review.

Following the UK's exit from the European Union, over the past two years, all proposed stages of the new Solvency UK capital regime have been fully implemented. The Prudential Regulation Authority ("PRA") implemented the more straightforward items including a significant reduction in risk margin for life insurance business at the end of 2023, with revisions to the matching adjustment ("MA") rules to increase investment flexibility and the reforms in relation to fundamental spread applied during 2024. In the second half of 2025, we expect the PRA to publish the results of an industry wide life insurance stress test ("LIST"). LIST will apply to a shortlist of UK life insurers and include one core scenario and two additional exploratory scenarios that build on the first. The results of the core scenario will be published at an individual firm level.

OUTLOOK

The trajectory of central bank interest rates will be dependent on how new government policies and wider macro and geopolitical forces impact the future level of inflation. These external forces have a negligible impact on the Group's business model, with the normalisation of long-term interest rates continuing to drive demand for our products. Our positioning, reputation and capabilities, including investments in our people enable us to continue to strongly execute as we take advantage of the multiple growth opportunities in our chosen markets.

We have a strong and resilient capital base, with a low-strain business model that is generating sufficient capital on an underlying basis to fund our ambitious growth plans, whilst also paying a progressive shareholder dividend that is expected to grow over time.

ALTERNATIVE PERFORMANCE MEASURES AND KEY PERFORMANCE INDICATORS

The Group uses a combination of alternative performance measures ("APMs") and IFRS statutory performance measures. The Board believes that the use of APMs gives a useful insight into the underlying performance of the Group.

The Directors have concluded that the principles used as a basis for the calculation of the APMs remain appropriate. Just Group has been growing strongly for a number of years and regards the writing of profitable new business contracts as a key objective for management. As a result, in management's view, the use of a performance measure which includes the value of profits deferred for recognition in future periods is a useful alternative to IFRS profits under IFRS 17 which exclude the deferred profits from new business sales.

Further information on our APMs can be found in the glossary, together with a reference to where the APM has been reconciled to the nearest statutory equivalent. KPIs are regularly reviewed against the Group's strategic objectives, no changes have been made in 2024. The Group's KPIs are discussed in more detail on the following pages.

 

The Group's KPIs are shown below:

	2024	2023	Change
Retirement Income sales (shareholder funded)1	£5,308m	£3,893m	36%
New business profit1	£460m	£355m	30%
Underlying operating profit1	£504m	£377m	34%
IFRS profit before tax	£113m	£172m	(34)%
Return on equity1	15.3%	13.5%	+1.8pp
Tangible net asset value per share1	254p	224p	+30p
New business strain1 (as % of premium)	1.3%	0.9%	+0.4pp
Underlying organic capital generation1	£23m	£57m	(60)%
Solvency capital coverage ratio2,3	204%	197%	+7pp

 

1    Alternative performance measure, see glossary for definition.

2    Solvency capital coverage ratios as at 31 December 2024 (estimated) and 31 December 2023 include a recalculation of TMTP at the respective dates.

3    2024 capital position is presented on a proforma basis after the impact of the February 2025 repayment of Tier 3 subordinated debt.

TANGIBLE NET ASSETS / RETURN ON EQUITY (UNDERLYING)

The return on equity in the year to 31 December 2024 was 15.3% (2023: 13.5%), based on underlying operating profit after attributed tax of £378m (2023: £288m) arising on average adjusted tangible net assets of £2,475m (2023: £2,133m). Tangible net assets are reconciled to IFRS total equity as follows:

	31 December 2024 £m	31 December 2023 £m
IFRS total equity attributable to ordinary shareholders	924	883
Less intangible assets	(40)	(41)
Tax on amortised intangible assets	1	2
Add back contractual service margin	2,328	1,959
Adjust for tax on contractual service margin	(578)	(488)
Tangible net assets	2,635	2,315
Tangible net assets per share	254p	224p
Return on equity % (underlying)	15.3%	13.5%

 

UNDERLYING OPERATING PROFIT

Underlying operating profit is a core performance metric on which we measure the year to year performance of the business. It includes the value of profits deferred for recognition in future periods. Underlying operating profit captures the performance and running costs of the business including interest on the capital structure, but excludes operating experience and assumption changes, which by their nature are less predictable and can vary substantially from period to period.

2024 underlying operating profit grew by 34% to £504m (2023: £377m), as we strongly outperformed against both the prior year and our profit growth target. We set the 15% per annum profit growth target from the 2021 baseline (£211m), and significantly outperformed a more than doubling of underlying operating profit in three years instead of five.

	Year ended 31 December 2024 £m	Year ended 31 December 2023 £m	Change %
New business profit	460	355	30
CSM amortisation	(71)	(62)	15
Net underlying CSM increase	389	293	33
In-force operating profit	236	191	24
Other Group companies' operating results1	(17)	(15)	13
Development costs and other1	(35)	(24)	46
Finance costs	(69)	(68)	1
Underlying operating profit2	504	377	34

 

1   The classification of costs within Other group companies operating results and Development costs and other has been aligned with the presentation in Solvency II.

2   See reconciliation to IFRS profit before tax further in this Business Review.

NEW BUSINESS PROFIT

New business profit was up 30% at £460m (2023: £355m) driven by 36% increase in shareholder funded Retirement Income sales to £5.3bn (2023: £3.9bn). Despite the significantly higher volumes, we continued to focus on risk selection, which combined with strong pricing discipline, market insight and internally originating increasing quantities of illiquid assets all contributed towards offsetting the headwind of tighter credit spreads. New business margin decreased to 8.7% (2023: 9.1%), but was in-line with the recent average.

MOVEMENT IN CSM

The total movement in CSM represents the net underlying increase of profit deferral in CSM during the year before any transfers to CSM in respect of operating experience and assumption changes recognised in the current year.

The new business profit of £460m deferred in CSM is three times higher than the CSM in-force release (£154m). This provides a healthy level of replacement profit, and demonstrates the value of new business written during the year relative to the CSM release from existing business. This strong growth dynamic increases the CSM store of value, which predictably releases into the recurring in-force profit in future years.

CSM amortisation is the release from the CSM reserve into profit as services are provided, net of accretion (unwind of discount) on the CSM reserve balance (see below). £71m of net CSM amortisation (2023: £62m) is a £154m release of CSM into profit, offset by £83m of interest accreted to the CSM. The £154m CSM release into profit (2023: £129m) represents 6.2% (2023: 6.2%) of the CSM balance immediately prior to release.

Accretion at locked in rates on the CSM balance was £83m (2023: £67m), adding 3.4% (2023: 3.4%) to the CSM. The rate of accretion reflects the interest rates locked in on IFRS 17 transition and prevailing rates for subsequent new business written.

IN-FORCE OPERATING PROFIT

In-force operating profit represents investment returns earned on surplus assets, the release of allowances for credit default, CSM amortisation, release of risk adjustment allowance for non-financial risk and other items. Taken together, these are the key elements of the operating profit from insurance activities on an IFRS 17 basis.

	Year ended 31 December 2024 £m	Year ended 31 December 2023 £m	Change %
Investment return earned on surplus assets	133	100	33
Release of allowances for credit default	29	28	4
CSM amortisation	71	62	15
Release of risk adjustment for non-financial risk / Other	3	1	n/a
In-force operating profit	236	191	24

 

The in-force operating profit increased by 24% to £236m (2023: £191m), driven by a significant increase in investment return, as a result of a greater amount of surplus assets. The higher release of allowance for credit default reflects growth in the investment portfolio that backs the insurance guarantees we provide to our customers. Increase in CSM amortisation is due to growth in the CSM release offset by the higher accretion as noted earlier.

OTHER GROUP COMPANIES' OPERATING RESULTS

Other Group companies operating results of £17m (2023: £15m) include the net cost of corporate and proposition related initiatives in the HUB group of businesses and the Group's holding companies. This reflects the Group's commitment to investing in delivery against our longer-term strategic priorities.

DEVELOPMENT COSTS AND OTHER

Development costs and other include development costs of £25m (2023: £17m) and £10m of other items (2023: £7m). Development costs relate to investment in systems capability, in addition to various business line and functional transformation. This investment will enable Just to continue to grow efficiently allowing us to increasingly benefit from operational gearing, while managing our risks and delivering products and services to our customers and business partners through the latest technology.

FINANCE COSTS

Finance costs are stable at £69m (2023: £68m). These include the coupon on the Group's Restricted Tier 1 notes, as well as the interest payable on the Group's Tier 2 and Tier 3 notes.

Due to favourable market conditions, in September 2024, the Group prudently refinanced its £250m Tier 2 (callable from October 2025) and £155m Tier 3 (repaid in February 2025) into a single £400m Tier 2 bond, while extending maturity to 2035. A larger and more liquid bond has expanded the pool of investors available to Just, which improved pricing, while also acting as a reference point for future issuance.

Reflecting growth in the balance sheet and our ambitious growth plans for the future, in June 2024, we exercised our ability to increase the £300m revolving credit facility to £400m, while extending it to June 2027. The facility is provided by eight banks and has not been drawn upon since inception.

On a statutory IFRS basis, the Restricted Tier 1 coupon is accounted for as a distribution of capital, consistent with the classification of the Restricted Tier 1 notes as equity, but the coupon is included as a finance cost on an underlying and adjusted operating profit basis.

RETIREMENT INCOME SALES

	Year ended 31 December 2024 £m	Year ended 31 December 2023 £m	Change %
Defined Benefit De-risking Solutions ("DB")1	4,275	2,999	43
Guaranteed Income for Life Solutions ("GIfL")2	1,033	894	16
Retirement Income sales (shareholder funded)	5,308	3,893	36
DB Partner (funded reinsurance)1	1,101	416	165
Total Retirement Income sales	6,409	4,309	49

 

1    Adding the DB shareholder funded and Partner business leads to total DB de-risking sales volumes of £5,376m (2023: £3,415m).

2    GIfL includes UK GIfL, South Africa GIfL and Care Plans.

The structural drivers and trends in our markets underpin our confidence that we can continue to deliver attractive returns and growth rates over the long-term. We are extremely well positioned to take advantage of the growth opportunities available in both of our chosen markets. Over the past three years, rising interest rates have accelerated the closure of, and in most cases eliminated, DB pension scheme funding gaps. Therefore, more of our target schemes are able to begin the process to be "transaction ready", accelerating business into our short/medium-term pipeline that previously would have been expected to transact in the second half of the decade. The retail GIfL market is also buoyant, driven by the customer rate available and advisers shopping around in the Open market. The level of long-term interest rates directly influences the customer rate we can offer, which is further augmented by individual medical underwriting. This increases the value of the guarantee to customers, making the product more attractive relative to other forms of retirement income. We will take advantage of this very strong market backdrop through our low-strain new business model, which enables us to fund our ambitious growth plans through the Group's cash generation. When combined with our proven ability to originate high-quality illiquid assets, shareholder capital invested in new business adds substantially to increasing existing shareholder value.

Shareholder funded DB sales at £4,275m (2023: £2,999m) were up 43%, as we were consistently busy throughout the year. In November, we announced our largest DB transaction to date at £1.8bn with the G4S pension scheme, comprising a full scheme Buy-in with c.22,500 pensioner and deferred members. In writing this transaction, we demonstrated our extensive structuring and operational capabilities, including our large deal framework and DB Partner (funded reinsurance) proposition to reinsure all of the investment and longevity risks on 60% of the deal, with the remaining 40% subject to our existing reinsurance structures on new business. The upfront origination fee received from our external reinsurance partner partially offsets the new business strain incurred on the £4.3bn of DB new business funded by Just's shareholders. Transactions of this type are additive to Just's core shareholder funded business by generating incremental fee income, while being repeatable, scalable and providing optionality going forward. Adding both shareholder funded and partner sales, DB wrote £5,376m of new business, up 57% year on year (2023: £3,415m), representing an 11% share of a £47bn DB market in 2024 (source: ABI, Just analysis).

In 2024, we completed 129 deals, of which 120 were below £100m in transaction size. Prior investment in our proposition and early positioning enabled Just to take advantage of the very strong market demand, particularly for small transactions, which are typically less hedged to interest rates. Over the past three years, Just has completed 265 transactions, representing over a third of all deals written in the market during that time. As part of our proposition to EBCs (employee benefit consultants), trustees, and scheme sponsors, we are always available to service and quote for schemes of all sizes, as evidenced from our consistently high activity levels. Our whole of market offering is demonstrated by the 2024 transaction range from £0.5m (our smallest to date) to £1.8bn (our largest to date).

We maintained our leadership position in the less than £100m transaction size segment, writing £1.8bn of business (2023: £1.4bn), with a further £1.7bn from the £100m-£1bn medium transaction size segment. Combined, we estimate that this resulted in a c.20% market share by value in the up to £1bn transaction size part of the market, a doubling over the past three years. Due to schemes improved funding position, there are now increased opportunities in the large deal transaction size segment (£1bn plus), as per 2024's £1.8bn G4S transaction, where we will continue to actively quote and selectively participate. Our proprietary bulk quotation and price monitoring service, ("Beacon"), continues to grow in popularity with over 350 DB schemes now onboarded. Demonstrating the success of the service, all major EBCs completed a transaction during the year, reflecting its universal adoption across the industry. Beacon provides access to the DB de-risking market for trustees, accelerates transaction flow for EBCs by providing a streamlined process and provides a steady source of completions for Just. Recent examples include a £0.8m DB transaction with a charity, an £8m scheme that had been price monitored since 2021, before interest rates rose, and a £30m scheme where we transacted only six weeks after first receiving the member data - a unique turnaround time due to our talented people, client focussed culture, systems infrastructure and streamlined processes.

GIfL sales were up 16% to £1,033m (2023: £894m). A strong foundation from the first half, together with continued market strength in the second half enables us to utilise our market leading medical underwriting to risk select more profitable and niche segments of a larger individual GIfL market. Due to the higher customer rates now on offer, advisers and customers are positively inclined to use guaranteed income in their retirement planning. The introduction of the FCA's Consumer Duty in July 2023 and the findings from the FCA's thematic review into retirement income advice published in March 2024 are leading advisers to re-examine the importance of considering guaranteed solutions to help customers achieve their objectives.

In recognition of our consistent level of customer service and excellence, in November, at the FT Financial Adviser Service Awards ("FASA"), Just won its 20th consecutive five star award in the Pensions and Protection Providers category, and five star award for the 15th time in the Mortgage Providers category. In both categories, Just scored particularly highly on product support, product knowledge, communications and reliability. This consistent high level of service was achieved even as business volumes grew strongly in 2023 and 2024, and is a testament to the dedication from the customer service and business development teams.

LIFETIME MORTGAGES ADVANCES

2024 internally funded lifetime mortgage advances were £326m (2023: £164m). In 2024, the LTM market fell by 11% to £2.3bn, but began to stabilise towards the end of the year. We continue to be selective, and use our market insight and distribution to target certain sub-segments of the market. LTMs remain an attractive asset class, however, in a higher interest rate environment, the capital charge attaching to the NNEG risk becomes onerous and hence we carefully monitor the loan to value and borrower age at inception. Prior investment in LTM digital capabilities and proposition has been well received by financial advisers, resulting in retention of our five star service award, as mentioned above.

RECONCILIATION OF UNDERLYING OPERATING PROFIT TO IFRS PROFIT BEFORE TAX

	Year ended 31 December 2024 £m	Year ended 31 December 2023 £m
Underlying operating profit1	504	377
Operating experience and assumption changes	(37)	52
Adjusted operating profit before tax1	467	429
Investment and economic movements	18	92
Strategic expenditure	(23)	(17)
Adjustment for transactions reported directly in equity in IFRS	20	16
Adjusted profit before tax1	482	520
Deferral of profit in CSM	(369)	(348)
Profit before tax	113	172

 

1    Alternative performance measure, see glossary for definition.

OPERATING EXPERIENCE AND ASSUMPTION CHANGES

As usual, the Group carried out a full basis review in December 2024, and has updated its longevity reserving using the CMI 2023 mortality tables (2023: CMI 2022). Assessment of the longer-term impact of the pandemic on the population continues to evolve. Our year end assumptions reflect our expectation that longer term mortality rates are predicted to be marginally higher than previously as challenges over NHS funding, retention of healthcare staff and insufficient investment mean that future healthcare capacity could be insufficient to meet increased demand from an ageing, growing population.

Operating experience and assumption changes were £(37)m (2023: £52m release). The Group reported negative operating experience of £14m in 2024 (2023: negative £10m). Assumption changes resulted in a £(23)m strengthening (2023: £62m reserve release), and were primarily driven by a strengthening of the Group's maintenance expense assumption. Sensitivity analysis is shown in notes 16 and 22 of the Annual Report and Accounts, which sets out the impact on the IFRS results from changes to key assumptions, including mortality, expenses and property.

INVESTMENT AND ECONOMIC MOVEMENTS

	Year ended 31 December 2024 £m	Year ended 31 December 2023 £m
Change in interest rates	1	(5)
Narrower/(Wider) credit spreads	6	44
Property growth experience	(22)	(13)
Other	33	66
Investment and economic movements	18	92

 

Investment and economic movements were positive at £18m (2023: £92m). Movements in risk free rates have had a negligible effect due to the revised hedging strategy that was first implemented in the latter part of 2022 and continued into 2023 and 2024. This includes the purchase of £4.0bn (2023: £2.5bn) of long dated gilts held at amortised cost under IFRS. This approach has almost eliminated the IFRS exposure¹ whilst also containing our Solvency II sensitivity to future interest rate movements (see estimated Group Solvency II sensitivities below).

Credit spreads further narrowed during 2024 leading to a positive £6m movement (2023: credit spreads narrowed leading to a positive movement of £44m). The LTM portfolio property growth performed a little below the 3.3% annual long-term property growth assumption (2023: 3.3% annual property growth assumption), resulting in a negative variance. Other includes positives from corporate bond default experience, investment return on surplus assets being above the assumption allowed for in the in-force operating profit, offset by lower asset trading and other variances.

1    See note 22 of the Annual Report and Accounts for interest rate sensitivities, with a 100 bps increase in interest rates resulting in an increase in pre-tax profit of £19m and a 100 bps decrease in interest rates resulting in a decrease in pre-tax profit of £(24)m.

STRATEGIC EXPENDITURE

Strategic expenditure was £23m (2023: £17m). This included increased investment to scale and bring to market various retail related propositions, corporate project costs and costs in relation to the implementation of Consumer Duty, Solvency UK reforms, and the internal model update.

UNDERLYING EARNINGS PER SHARE

Underlying EPS (based on underlying operating profit after attributed tax) has increased to 36.3 pence (2023: 27.9 pence).

	Year ended 31 December 2024	Year ended 31 December 2023
Underlying operating profit (£m)	504	377
Attributable tax (£m)	(126)	(89)
Underlying operating profit after attributable tax (£m)	378	288
Weighted average number of shares (million)	1,040	1,032
Underlying EPS1 (pence)	36.3	27.9

 

1    Alternative performance measure, see glossary for definition.

EARNINGS PER SHARE

Earnings per share (based on net profit after tax) has decreased to 6.5 pence (2023: 11.3 pence). This includes any operating experience and assumption changes, the non-operating items and deferral of profit to the CSM reserve, and reflects the IFRS 17 statutory profit.

	Year ended 31 December 2024	Year ended 31 December 2023
Profit before tax (£m)	113	172
Tax (£m)	(33)	(43)
Profit attributable to equity holders of Just Group Plc (£m)	80	129
Coupon payments in respect of Tier 1 notes (net of tax) (£m)	(12)	(12)
Earnings (£m)	68	117
Weighted average number of shares (million)	1,040	1,032
EPS (pence)	6.5	11.3

 

CAPITAL MANAGEMENT

The Group's proforma capital coverage ratio was 204% at 31 December 2024, including a recalculation of transitional measures on technical provisions ("TMTP") (31 December 2023: 197% including a recalculation of TMTP). The Solvency capital coverage ratio is a key metric and is one of the Group's KPIs.

Unaudited	Proforma 31 December 20241 £m	31 December 20231,2 £m
Own funds	3,055	3,104
Solvency Capital Requirement	(1,494)	(1,577)
Excess own funds	1,561	1,527
Proforma Solvency capital coverage ratio3	204%	197%

 

1    Includes a recalculation of TMTP.

2    2023 capital position is the reported regulatory position as included in the Group's Solvency and Financial Condition Report as at 31 December 2023.

3    2024 capital position is presented on a proforma basis after the impact of the February 2025 repayment of Tier 3 subordinated debt. The capital ratio at 31 December 2024 was 211% prior to this repayment. The 2024 capital position is estimated.

The Group has approval to apply the matching adjustment and TMTP in its calculation of technical provisions and uses an internal model to calculate its Group Solvency Capital Requirement ("SCR").

In July 2024, the Group received approval to expand the scope of its revised internal model, and applied it to include the Partnership business from 30 September 2024, which previously had its capital requirement calculated using Standard Formula. The application of a full internal model from this date has led to increased diversification benefits between the Group's two life companies, which has resulted in a reduction in SCR. This one-off effect accounted for 6% of the increase in the capital coverage ratio, and is included in the management actions and other items line in the Movement in Excess Own Funds analysis below.

MOVEMENT IN EXCESS OWN FUNDS¹

The business is delivering sufficient cash generation, which augmented with management actions, supports the deployment of capital to capture the significant growth opportunity available in our chosen markets, provide returns to our capital providers and further investment in the strategic growth of the business.

The table below analyses the movement in excess own funds, in the year to 31 December 2024.

Unaudited	Year ended 31 December 2024 (Proforma) £m	Year ended 31 December 2023 £m
Opening excess own funds at 1 January	1,527	1,370
Operating
In-force surplus net of TMTP amortisation	178	168
Financing costs	(48)	(49)
Group and other costs	(11)	(8)
Cash generation2	119	111
New business strain3	(71)	(35)
Development costs and other	(25)	(19)
Underlying organic capital generation2	23	57
Management actions and other items	58	69
Total organic capital generation2	81	126
Non-operating
Strategic expenditure	(17)	(13)
Dividends	(23)	(19)
Economic movements	49	(22)
Regulatory changes	(42)	109
Capital actions4	(14)	(24)
Proforma closing excess own funds	1,561	1,527

 

1    All figures are net of tax and include a formal recalculation of TMTP where applicable.

2    Alternative performance measure, see glossary for definition. Definition of cash generation has been revised in the year and development costs and other are now stated outside of this measure. 2023 cash generation has been restated.

3    New business strain calculated based on pricing assumptions.

4    Capital actions are the effect of Tier 2 buyback (2023 and 2024) together with the proforma impact of the February 2025 Tier 3 repayment) and includes the positive effect (if any) from release of Solvency tiering restrictions.

UNDERLYING ORGANIC CAPITAL GENERATION AND NEW BUSINESS STRAIN

The Group is focused on sustainable growth, whereby the various costs of the business including TMTP amortisation, finance and other costs, and new business strain is funded through the cash generation from the existing in-force book. In 2024, we have delivered £23m of underlying organic capital generation (2023: £57m), as the 36% increase in shareholder funded new business led to a higher amount of new business strain. Management actions and other items, including the impact of the move to a full internal model, increased the capital surplus by £58m (2023: £69m). This led to a total of £81m from organic capital generation (2023: £126m).

In-force surplus after TMTP amortisation was up 6% to £178m, as growth in assets was offset by lower release from the risk margin reserve. The Solvency UK reforms led to a welcomed c.60% reduction in risk margin balance, which boosted the surplus by an upfront £107m in 2023, however, that prudent margin is no longer available to release annually into future capital generation. Group and other costs including non-life costs were £11m (2023: £8m), reflecting the non-insurance subsidiaries. Finance costs were flat at £48m. Cash generation available to support new business was £119m (2023: £111m).

The Group continues to maximise the growth opportunities available to increase shareholder value. In 2024, due to writing £5.3bn of shareholder funded new business (2023: £3.9bn), new business strain increased to £71m (2023: £35m), which represents 1.3% of new business premium (2023: 0.9% of premium), well within our target of below 2.5% of premium, and outperforming the 5 year average (1.5%). This is due to a continued combination of focused risk selection and DB/GIfL business mix based on our market insight, pricing discipline, operational gearing and originating sufficient quantities of high-quality illiquid assets.

Development costs and other were £25m (2023: £19m).

NON-OPERATING ITEMS

Changes in capital surplus were as follows. Together, economic movements summed to a £49m increase. This is derived from the £(10)m effect of the increase in long term interest rates at year end, but as the SCR fell more relative to the Own Funds, it resulted in a five percentage point increase in the capital coverage ratio. Property price growth experience was a little below the 3.3% long-term growth assumption, which led to a £(19)m decrease, while various economic and timing variances lead to a £78m increase.

Payment of shareholder dividends during 2024 cost £23m, while strategic expenses reduced the capital surplus by a further £17m.

Regulatory changes relate to the Solvency UK reforms for matching adjustment attestation and other items as explained in note 30 of the Annual Report and Accounts.

Capital actions refer to the effect of raising £400m Tier 2 debt in September 2024, the proceeds of which were used to fully repay £250m (nominal) of Tier 2 debt in September/October 2024 and £155m (nominal) of Tier 3 debt in February 2025. There were no capital restrictions following the Tier 3 repayment or deferred tax assets in the proforma closing excess own funds.

proforma GROUP SOLVENCY II SENSITIVITIES

The property sensitivity for an immediate 10% fall in UK house prices has reduced to 6% (31 December 2023: 10%). This reduction has been driven by modelling refinements following implementation of the internal model on the Partnership business. We expect that a reduced LTM backing ratio on new business will contain the Solvency II sensitivity to house prices within risk appetite. The credit quality step downgrade sensitivity has slightly reduced due to credit spreads narrowing during the period, which decreases the cost of trading the 10% of our credit portfolio³ assumed to be downgraded back to their original credit rating.

Sensitivities to economic and other key metrics are shown in the table below.

Unaudited	At 31 December 2024
	CCR %	Excess own funds £m
Proforma solvency coverage ratio/excess own funds at 31 December 20241,2,3,4	204	1,561
-50bps fall in interest rates (with TMTP recalculation)	(4)	59
+50bps increase in interest rates (with TMTP recalculation)	4	(59)
+100bps credit spreads (with TMTP recalculation)	11	106
Credit quality step downgrade5	(6)	(89)
-10% property values (with TMTP recalculation)6	(6)	(84)
-5% mortality	(8)	(129)

 

1    The sensitivities above are determined by applying stresses to single risk factors. Stresses to multiple risk factors at the same time can create more severe outcomes than on individual factors as reported above.

2    In all sensitivities the Effective Value Test ("EVT") deferment rate is allowed to change subject to the minimum deferment rate floor of 3.5% as at 31 December 2024.

3    The results do not include the impact of capital tiering restriction, if applicable.

4    Sensitivities are applied to the reported proforma capital position which includes a TMTP recalculation.

5    Credit migration stress covers the cost of an immediate big letter downgrade (e.g. AAA to AA or A to BBB) on 10% of all assets where the capital treatment depends on a credit rating (including corporate bonds, long income real estate/income strips; but lifetime mortgage senior notes are excluded). Downgraded assets are assumed to be traded to their original credit rating, so the impact is primarily a reduction in Own Funds from the loss of value on downgrade. The impact of the sensitivity will depend upon the market levels of spreads at the balance sheet date. In addition, for residential ground rents, the Group has identified that the impact of downgrading the entire portfolio to BBB would reduce Excess own funds (the capital surplus) by £22m and CCR% by two percentage points.

6    After application of NNEG hedges.

RECONCILIATION OF IFRS EQUITY TO SOLVENCY OWN FUNDS

	31 December 2024 £m	31 December 2023 £m
IFRS net equity	1,246	1,203
CSM	2,328	1,959
Goodwill	(34)	(34)
Intangibles	(6)	(7)
Solvency risk margin	(194)	(196)
Solvency TMTP1	409	637
Other valuation differences and impact on deferred tax	(1,316)	(1,059)
Ineligible items	(3)	(5)
Subordinated debt	643	619
Group adjustments	(18)	(13)
Solvency own funds1	3,055	3,104
Solvency SCR1	(1,494)	(1,577)
Proforma solvency excess own funds1,2	1,561	1,527

 

1    Solvency capital coverage ratios as at 31 December 2024 and 31 December 2023 includes a recalculation of TMTP.

2    2024 capital position is presented on a proforma basis after the impact of the February 2025 repayment of Tier 3 subordinated debt.

Reconciliation from operating profit to ifrs consolidated statement of comprehensive income

The table below presents the reconciliation from the Group's APM income statement view to the IFRS statement of comprehensive income for the Group.

						Statutory accounts format
31 December 2024	Reported1 £m	Quote date difference2 £m	CSM deferral3 £m	Adjusted total4 £m		Insurance service result £m	Net investment result £m	Other finance costs £m	Other income, expenses and associates £m	PBT £m
ALTERNATIVE PROFIT MEASURE FORMAT
New business profit	460	2	(462)	-
CSM amortisation	(71)		71	-
Net underlying CSM increase	389	2	(391)	-
In-force operating profit:
Investment return earned on surplus assets	133			133			133			133
Release of allowances for credit default	29			29			29			29
CSM amortisation	71			71		154	(83)			71
Release of risk adjustment for non-financial risk/other	3			3		7	(4)			3
Other Group companies' operating results	(17)			(17)					(17)	(17)
Development costs and other	(35)			(35)					(35)	(35)
Finance costs	(69)			(69)				(69)		(69)
Underlying operating profit	504	2	(391)	115
Operating experience and assumption changes	(37)		22	(15)		(12)	(3)			(15)
Adjusted operating profit before tax	467	2	(369)	100
Investment and economic movements	18	(2)		16			226	(192)	(18)	16
Strategic expenditure	(23)			(23)					(23)	(23)
Adjustment for transactions reported directly in equity in IFRS	20			20				20		20
Adjusted profit before tax	482		(369)	113
Deferral of profit in CSM	(369)		369	-
Profit before tax	113			113		149	298	(241)	(93)	113

 

1    The rows and first numeric column of this table present the Reported alternative profit measure (APM) format as presented in the Underlying operating profit section and Reconciliation of Underlying operating profit to IFRS profit before tax section of this review.

2    The Quote date difference adjustment is made because Just bases its assessment of new business profitability for management purposes on the economic parameters prevailing at the quote date of the business instead of completion dates as required by IFRS 17 (see new business profit reconciliation in the additional information section towards the end of this announcement).

3    The CSM column presents how elements of the APM basis result are deferred in the CSM reserve held on the IFRS balance sheet consistent with the table in the Deferral of profit in CSM section of this review. Under IFRS 17, new business profits and the impact of changes to estimates of future cash flows are deferred in the CSM reserve for release over the life of contracts.

4    The Adjusted total column is then transposed in the columns on the right-hand side into the IFRS statutory accounts Condensed consolidated statement of comprehensive income format. Figures are presented on a net of reinsurance basis.

The IFRS profit before tax of £113m (2023: £172m) is reported after deferral of £460m new business profit in CSM (2023: £355m) and assumption changes of £22m increase (2023: £67m reduction) in the balance sheet. The CSM amortisation recognised in the IFRS result of £71m (2023: £62m) reflects the recognition of services provided in the year net of accretion. This is expected to increase as our stock of CSM grows with new business. The pre-tax CSM closing balance stands at £2,328m (2023: £1,959m), as per the table in the Deferral of profit in CSM section of this report.

Investment and economic movements recognised within IFRS finance costs of £192m (2023: £70m) include a full year's worth of interest on repurchase agreements of £146m (2023: £70m) that fund the Group's increased amortised cost portfolio of sovereign gilts that now stands at £4.0bn (2023: £2.5bn). Interest earned on the amortised cost gilts of £135m (2023: £54m) is reported within net investment result. Net interest paid on collateral of £1m is reported gross within net investment result for interest income of £34m and in finance costs for interest paid of £35m.

The remaining impact on Net investment result, and IFRS PBT, from investment and economic movements of £57m (2023: 145m) relates to changes in long-term interest rates, and where the impact on the investment portfolio backing insurance contracts does not perfectly match the impact on reserves.

HIGHLIGHTS FROM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The table below presents selected items from the Condensed consolidated statement of financial position. The information below is extracted from the statutory consolidated statement of financial position.

	31 December 2024 £m	31 December 2023 £m
Assets
Financial investments	34,390	29,423
Reinsurance contract assets	2,067	1,143
Cash available on demand	808	546
Other assets	657	726
Total assets	37,922	31,838
Share capital and share premium	199	199
Other reserves	944	943
Retained earnings and other adjustments	(219)	(259)
Total equity attributable to ordinary shareholders of Just Group plc	924	883
Tier 1 notes	322	322
Non-controlling interest	-	(2)
Total equity	1,246	1,203
Liabilities
Insurance contract liabilities	27,753	24,131
Reinsurance contract liabilities	94	125
Payables and other financial liabilities1	7,889	5,608
Other liabilities	940	771
Total liabilities	36,676	30,635
Total equity and liabilities	37,922	31,838

 

1    Other payables has been aggregated with other financial liabilities in all periods presented.

The amounts reported in the Condensed consolidated statement of financial position above for Insurance and Reinsurance contracts include our best estimate, risk adjustment and contractual service margin "CSM". The analysis of these is as follows.

	31 December 2024				31 December 2023
	Gross £m	Net Reinsurance £m	Net £m		Gross £m	Net Reinsurance £m	Net £m
Best estimate	23,970	(838)	23,132		20,758	64	20,822
Risk adjustment	1,052	(732)	320		924	(592)	332
CSM	2,731	(403)	2,328		2,449	(490)	1,959
Net closing balance	27,753	(1,973)	25,780		24,131	(1,018)	23,113

 

After tax, the closing CSM is £1,750m (31 December 2023: £1,471m).

 

FINANCIAL INVESTMENTS

During the year, financial investments increased by £4.9bn to £34.5bn (31 December 2023: £29.6bn). Excluding derivatives and collateral, and gilts purchased in relation to the interest rate hedging, the core investments portfolio on which we take credit risk increased by 13% to £27.0bn. The increase in the portfolio has been driven by investment of the Group's £5.3bn of shareholder backed new business premiums and credit spread tightening, offset by the increase in long-term risk-free rates at the 2024 year end compared to the previous year end, which decreases the market value of the assets (and matched liabilities). The credit quality of the Group's bond portfolio remains resilient, with 62% rated A or above (31 December 2023: 54%), driven by an increase in allocation to UK government gilts. Our diversified portfolio continues to grow and is well balanced across a range of industry sectors and geographies.

We continue to position the portfolio with a defensive bias. The Group continues to have very limited exposure to those sectors that are most sensitive to structural change or macroeconomic conditions, such as auto manufacturers, consumer (cyclical), energy and basic materials. The Group has further increased its infrastructure investments, driven by social housing and private placement assets. We continue to increase long income real estate assets from a low base as we originated a number of large investments internally through our in-house team, but reduced the allocation towards other sectors. The increase in government bonds and liquidity is driven by the tighter corporate credit spreads, with excess cash and gilts expected to be recycled into corporate credit and illiquid assets as opportunities arise. The BBB rated bonds are weighted towards the most defensive sectors including utilities, communications and technology, and infrastructure.

We prudently manage the balance sheet by hedging all foreign exchange and inflation exposure, and continue to execute strategic interest rate hedging. This involves the purchase of £4.0bn of long dated gilts, which are held at amortised cost under IFRS. The effect is to significantly reduce the Solvency II sensitivity to future interest rate movements, without exposing the IFRS position to interest rate volatility on these assets.

Illiquid assets

To support new business pricing, optimise back book returns, and further diversify its investments, the Group originates illiquid assets including infrastructure, real estate investments, private placements and lifetime mortgages. Income producing real estate investments are typically much longer duration and hence the cash flow profile is beneficial, especially to match DB deferred liabilities.

In 2024, we funded £2.4bn of illiquid assets, which represents a 45% new business backing ratio. Over the past two years, we have invested in our Investments function, and are now directly originating illiquids from particular asset classes (e.g. social housing, private placements and commercial ground rents), in addition to lifetime mortgages. These amounted to £1.0bn and £0.3bn respectively. In parallel, we originated the remaining £1.1bn of illiquid assets via a panel of 13 specialist external asset managers, each carefully selected based on their particular area of expertise. Our illiquid asset origination strategy allows us to efficiently scale origination of new investments, and to flex allocations between sectors depending on market conditions and risk adjusted returns.

To date, Just has invested £6.6bn in illiquid assets (excluding LTMs), representing 24% of the investments portfolio (31 December 2023: 21%), spread across more than 360 investments (average £18m), both UK and abroad. We have invested in our in-house credit team as we have broadened the illiquid asset origination, and work very closely with our specialist asset managers on structuring to enhance our security, with a right to veto on each asset. We anticipate that the Solvency UK and wider government reforms in pensions and planning will increase the investment opportunities available to us through wider matching adjustment ("MA") eligibility criteria, such as callable bonds, or assets with a construction phase, where the commencement of cashflows is not entirely certain. These changes to the MA are part of a package, that when fully implemented are designed to support the pledge made by the insurance industry to generate £100bn of productive investments over the next decade to support UK economic growth.

Lifetime mortgages at £5.6bn represent 21% of the investments portfolio, which we expect to continue reducing over time as we originate fewer new LTMs and diversify the portfolio with other illiquid assets. The loan-to-value ratio of the in-force lifetime mortgage portfolio was 39.0% (31 December 2023: 38.2%), reflecting the gradual seasoning of the mortgages across our geographically diversified portfolio, as house price growth partially offset the interest roll-up during the year. In 2024, shareholder funded LTM advances were £326m (2023: £164m). We continue to be selective and use our market insight to target sub-segments of the market.

The following table provides a breakdown by credit rating of financial investments, including privately rated investments allocated to the appropriate rating.

	31 December 2024 £m	31 December 2024 %	31 December 2023 £m	31 December 2023 %
AAA1	2,766	8	2,252	8
AA1 and gilts	8,354	24	5,327	18
A1,2	8,853	26	7,239	24
BBB1,2	7,826	23	8,083	27
BB or below1,2	195	1	176	1
Lifetime mortgages	5,637	16	5,681	19
Unrated1	894	2	837	3
Total1,2,3	34,525	100	29,595	100

 

1    Includes liquidity funds, derivatives, collateral and gilts (interest rate hedging).

2    Includes investment in trusts which holds long income real estate assets that are included in investment properties and investments accounted for using the equity method in the IFRS Consolidated statement of financial position.

3    The residential ground rent portfolio market value is £157m, and is rated AAA (2023: £164m rated AAA and £12m rated AA).

On 9 November 2023, the previous government published a consultation seeking views on capping the maximum ground rent that residential leaseholders can be required to pay, but did not implement any reform of residential ground rent before dissolution of parliament ahead of the election. The Group continues to closely monitor developments as leasehold reform was included in the new government's manifesto and subsequent King's Speech, and any adverse impact this may have on the Group's £157m by market value (2023: £176m market value) portfolio of residential ground rents. Reflecting the uncertainty associated with the Consultation, an adjustment was made at year end 2023 and the same approach to that adjustment has been followed at year end 2024. For further information on the Group's approach to the valuation of residential ground rents.

Sector

The sector analysis of the Group's financial investments portfolio is shown below and continues to be well diversified across a variety of industry sectors.

	31 December 2024 £m	31 December 2024 %	31 December 2023 £m	31 December 2023 %
Basic materials	109	0.4	149	0.6
Communications and technology	1,154	4.3	1,334	5.6
Auto manufacturers	85	0.3	130	0.5
Consumer staples (incl healthcare)	1,226	4.5	1,167	4.9
Consumer cyclical	178	0.7	197	0.8
Energy	278	1.0	378	1.6
Banks	1,469	5.4	1,606	6.7
Insurance	745	2.8	735	3.1
Financial - other	590	2.2	583	2.4
Real estate incl REITs	630	2.3	660	2.8
Government	3,081	11.4	1,767	7.4
Industrial	524	1.9	543	2.3
Utilities	2,452	9.1	2,637	11.0
Commercial mortgages1	809	3.0	764	3.2
Long income real estate2	1,808	6.7	1,154	4.8
Infrastructure	3,512	13.0	2,473	10.3
Other	43	0.2	42	0.2
Bond total	18,693	69.2	16,319	68.1
Other assets	888	3.3	822	3.4
Lifetime mortgages	5,637	20.9	5,681	23.7
Liquidity funds	1,792	6.6	1,141	4.8
Investments portfolio	27,010	100.0	23,963	100
Derivatives, collateral	3,564		3,083
Gilts (interest rate hedging)	3,951		2,549
Total	34,525		29,595

 

1    Includes investment in trusts which are included in investment properties in the IFRS Consolidated statement of financial position.

2    Includes direct long income real estate and where applicable, investment in trusts of £135m which are primarily included in investments accounted for using the equity method in the IFRS consolidated statement of financial position. Long income real estate includes £1,651m commercial ground rents/income strips and £157m residential ground rents.

REINSURANCE CONTRACT ASSETS AND LIABILITIES

The Group has identified separate portfolios of reinsurance contracts, based on whether or not the underlying contracts transfer financial risk in addition to longevity risk. The Group's contracts transferring financial risk are quota share arrangements which are in asset positions. Since the introduction of Solvency II in 2016, the Group has increased its use of reinsurance swaps rather than quota share treaties and these are in liability positions.

Reinsurance assets increased to £2,067m at 31 December 2024 (31 December 2023: £1,143m) as the funded reinsurance in relation to the DB Partner transaction in November 2024 was partially offset by other reinsurance quota share treaties which are in gradual run-off.

CASH AND OTHER ASSETS

Other assets (primarily cash) remained consistent at £1.5bn at 31 December 2024 (31 December 2023: £1.3bn). The Group holds significant amounts of assets in cash, so as to protect against liquidity stresses.

INSURANCE CONTRACT LIABILITIES

Insurance contract liabilities increased to £27.8bn at 31 December 2024 (31 December 2023: £24.1bn). The increase in liabilities reflects the new business premiums written, offset by an increase to the valuation rate of interest and policyholder payments over the period.

PAYABLES AND OTHER FINANCIAL LIABILITIES

Payables and other financial liabilities increased to £7.9bn at 31 December 2024 (31 December 2023: £5.6bn) due to an increase in repurchase agreements used to fund the Group's amortised cost portfolio of gilts which has increased by £1.4bn during 2024.

OTHER LIABILITIES

Other liability balances increased to £940m at 31 December 2024 (31 December 2023: £771m).

IFRS NET ASSETS

The Group's total equity at 31 December 2024 was £1.2bn (31 December 2023: £1.2bn). Total equity includes the Restricted Tier 1 notes of £322m (after issue costs) issued by the Group. The total equity attributable to ordinary shareholders increased to £924m (31 December 2023: £883m).

DEFERRAL OF PROFIT IN CSM

As noted above, underlying operating profit is the performance metric on which we had based our profit growth target. This includes new business profits deferred in CSM that will be released in future. When reconciling the underlying operating profit with the statutory IFRS profit it is necessary to adjust for the value of the net deferral of profit in CSM.

Net transfers to contractual service margin includes amounts that are recognised in profit or loss including the accretion and the amortisation of the contractual service margin. The table below is on a pre-tax basis:

	Year ended 31 December 2024				Year ended 31 December 2023
	Gross insurance contracts £m	Reinsurance contracts £m	Total £m		Gross insurance contracts £m	Reinsurance contracts £m	Total £m
CSM balance at 1 January	2,449	(490)	1,959		1,943	(332)	1,611
New Business initial CSM recognised	438	24	462		380	(37)	343
Accretion of interest on CSM	113	(30)	83		79	(12)	67
Changes to future cash flows at locked-in economic assumptions	(92)	70	(22)		203	(136)	67
Release of CSM	(177)	23	(154)		(156)	27	(129)
Net transfers to CSM	282	87	369		506	(158)	348
CSM balance at 31 December	2,731	(403)	2,328		2,449	(490)	1,959

 

The closing CSM balance (post tax) at 31 December 2024 is £1,750m (2023: £1,471m), which when added to £924m of total equity attributable to ordinary shareholders (2023: £883m) less £39m (post tax) intangible assets (2023: £39m), results in Tangible Net Assets of £2,635m or 254p per share (2023: £2,315m and 224p respectively), on which we earned a 15.3% Return on equity (2023: 13.5%).

Dividends

In line with our stated policy to grow the dividend over time, the Board is recommending a final dividend of 1.8 pence per share, or £19m, bringing the total dividend for the year ended 31 December 2024 to 2.5 pence per share, or £26m. The 20% growth in total dividend is a repeat of the 2023 dividend growth rate.

MARK GODSON

Group Chief Financial Officer

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2024

		Year ended 31 December 2024 £m	Year ended 31 December 2023  £m
Insurance revenue		1,809	1,555
Insurance service expenses		(1,621)	(1,396)
Net expenses from reinsurance contracts		(39)	(41)
Insurance service result		149	118
Interest income on financial assets measured at amortised cost		135	54
Other investment return		(263)	2,119
Investment return		(128)	2,173
Net finance income/(expenses) from insurance contracts		480	(2,006)
Net finance (expenses)/income from reinsurance contracts		(52)	108
Movement in investment contract liabilities		(2)	(2)
Net investment result		298	273
Other income		18	21
Other operating expenses		(85)	(104)
Other finance costs		(241)	(122)
Share of results of associates accounted for using the equity method		(26)	(14)
Profit before tax		113	172
Income tax expense		(33)	(43)
Profit for the year		80	129
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Revaluation of land and buildings		(2)	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations		(4)	-
Other comprehensive income for the year, net of income tax		(6)	-
Total comprehensive income for the year		74	129
Profit attributable to:
Equity holders of Just Group plc		80	129
Profit for the year		80	129
Total comprehensive income attributable to:
Equity holders of Just Group plc		74	129
Total comprehensive income for the year		74	129
Basic earnings per share (pence)		6.5	11.3
Diluted earnings per share (pence)		6.5	11.2

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2024

 

Year ended 31 December 2024		Share capital £m	Share premium £m	Other reserves £m	Retained earnings1 £m	Tier 1 notes £m	Total equity excluding NCI £m	Non-controlling interest  £m	Total  £m
At 1 January 2024		104	95	943	(259)	322	1,205	(2)	1,203
Profit for the year		-	-	-	80	-	80	-	80
Other comprehensive income for the period, net of income tax		-	-	(2)	(4)	-	(6)	-	(6)
Total comprehensive income for the year		-	-	(2)	76	-	74	-	74
Contributions and distributions
Dividends		-	-	-	(23)	-	(23)	-	(23)
Interest paid on Tier 1 notes (net of tax)		-	-	-	(12)	-	(12)	-	(12)
Share-based payments reserve credit (net of tax)		-	-	-	9	-	9	-	9
Transactions in shares held by trusts		-	-	3	(7)	-	(4)	-	(4)
Total contributions and distributions		-	-	3	(33)	-	(30)	-	(30)
Acquisition of non-controlling interest		-	-	-	(3)	-	(3)	2	(1)
Total changes in ownership interests		-	-	-	(3)	-	(3)	2	(1)
At 31 December 2024		104	95	944	(219)	322	1,246	-	1,246
Year ended 31 December 2023		Share capital £m	Share premium £m	Other reserves  £m	Retained earnings1 £m	Tier 1  notes £m	Total equity excluding NCI £m	Non-controlling interest £m	Total  £m
At 1 January 2023		104	95	938	(354)	322	1,105	(2)	1,103
Profit for the year		-	-	-	129	-	129	-	129
Total comprehensive income for the year		-	-	-	129	-	129	-	129
Contributions and distributions
Dividends		-	-	-	(19)	-	(19)	-	(19)
Interest paid on Tier 1 notes (net of tax)		-	-	-	(12)	-	(12)	-	(12)
Share-based payments reserve credit (net of tax)		-	-	-	7	-	7	-	7
Transactions in shares held by trusts		-	-	5	(10)	-	(5)	-	(5)
Total contributions and distributions		-	-	5	(34)	-	(29)	-	(29)
At 31 December 2023		104	95	943	(259)	322	1,205	(2)	1,203

 

1    Includes currency translation reserve of £5m (31 December 2023: £1m).

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2024

		31 December 2024  £m	31 December 2023 £m
Assets
Intangible assets		40	41
Property and equipment		20	22
Investment property		27	32
Financial investments		34,390	29,423
Investments accounted for using the equity method		119	149
Reinsurance contract assets		2,067	1,143
Deferred tax assets		387	406
Current tax assets		1	4
Prepayments and accrued income		14	12
Other receivables		49	60
Cash available on demand		808	546
Total assets		37,922	31,838
Equity
Share capital		104	104
Share premium		95	95
Other reserves		944	943
Retained earnings		(219)	(259)
Total equity attributable to shareholders of Just Group plc		924	883
Tier 1 notes		322	322
Total equity attributable to owners of Just Group plc		1,246	1,205
Non-controlling interest		-	(2)
Total equity		1,246	1,203
Liabilities
Insurance contract liabilities		27,753	24,131
Reinsurance contract liabilities		94	125
Investment contract liabilities		42	35
Loans and borrowings		839	686
Payables and other financial liabilities1		7,889	5,608
Accruals and provisions2		59	50
Total liabilities		36,676	30,635
Total equity and liabilities		37,922	31,838

 

1    Other payables has been aggregated with other financial liabilities in all periods presented.

2    Other provisions has been aggregated with accruals and deferred income in all periods presented.

The financial statements were approved by the Board of Directors on 6 March 2025 and were signed on its behalf by:

 

MARK GODSON

Director 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2024

		Year ended 31 December 2024 £m	Year ended 31 December 2023 £m
Cash flows from operating activities
Profit before tax		113	172
Adjustments for:
Depreciation of property and equipment		3	2
Share of results from associates		26	14
Amortisation of intangible assets		1	3
Impairment of intangible assets		-	3
Share-based payments		1	1
Interest income		(1,217)	(1,104)
Interest expense		241	122
Change in operating assets and liabilities:
Net increase in financial investments		(4,247)	(6,068)
Increase in net reinsurance contracts balance		(955)	(363)
Increase in prepayments and accrued income		(2)	(1)
Decrease in other receivables		10	3
Increase in insurance contract liabilities		3,622	4,484
Increase in investment contract liabilities		7	2
Increase in accruals and provisions		9	16
Increase in net derivative liabilities, financial liabilities and other payables1		2,101	1,774
Interest received		1,151	1,075
Taxation (paid)/received		(1)	6
Net cash inflow from operating activities		863	141
Cash flows from investing activities
Acquisition of property and equipment		(4)	(3)
Disposal of property		-	1
Dividends from associates		4	-
Net cash outflow from investing activities		-	(2)
Cash flows from financing activities
Proceeds on issue of borrowings (net of costs)		398	-
Payment on redemption of borrowings		(256)	(26)
Acquisition of non-controlling interests		(1)	-
Dividends paid		(23)	(19)
Coupon paid on Tier 1 notes		(16)	(16)
Interest paid on borrowings		(48)	(48)
Payment of lease liabilities - principal		(2)	(1)
Net cash inflow/(outflow) from financing activities		52	(110)
Net increase in cash and cash equivalents		915	29
Foreign exchange differences on cash balances		(2)	2
Cash and cash equivalents at 1 January		1,687	1,656
Cash and cash equivalents at 31 December		2,600	1,687
Cash available on demand		808	546
Units in liquidity funds		1,792	1,141
Cash and cash equivalents at 31 December		2,600	1,687

 

1    Other payables has been aggregated with other financial liabilities in all periods presented.

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

The consolidated financial statements in this announcement have been taken from the Just Group plc Annual Report and Accounts 2024. The consolidated financial statements have been prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and the disclosure guidance and transparency rules sourcebook of the United Kingdom's Financial Conduct Authority.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, certain financial assets and financial liabilities (including derivative instruments and investment contract liabilities) and investment properties at fair value and the accounting for the remeasurement of insurance and reinsurance contracts as required by IFRS 17. Unless otherwise stated, values are expressed to the nearest £1m.

The Just Group plc Annual Report and Accounts 2024, including the consolidated financial statements, is available on the Group's website https://www.justgroupplc.co.uk/investors/results-reports-and-presentations, and a copy has been submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The auditor has reported on those consolidated financial statements. Their reports for the years ended 31 December 2024 and 31 December 2023 were (i) unqualified, (ii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006, and (iii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report.

2. New accounting standards and new material accounting policies

The accounting policies adopted in the preparation of the Group's consolidated financial statements for the year ended 31 December 2024 are consistent with those adopted in the preparation of the Group's consolidated financial statements for the year ended 31 December 2023.

The following amendments to existing standards have been adopted by the Group but do not have a significant impact on the Group's accounting policies or financial statements:

·  IAS 1 "Presentation of financial statements" - Amendments in respect of the classification of liabilities as current or non-current.

·  IAS 1 "Presentation of financial statements" - Amendments in respect of non-current liabilities with covenants.

The following new accounting standards are in issue but not endorsed yet. These have not yet been adopted by the Group and are not expected to have a significant impact on the results within the financial statements:

·  IFRS 18 "Presentation and Disclosure in Financial Statements" (effective 1 January 2027 with restatement for comparatives). IFRS 18 introduces new requirements on presentation and disclosures in the financial statements, with a focus on the income statement and reporting of financial performance. Items in the statement of profit or loss will be classified into different categories such as operating, investing and financing. As a presentation and disclosure standard, the implementation of IFRS 18 will not affect the Group's results. The Group is considering the impact on the presentation of the Group's financial statements.

 

Additional information

The following additional financial information is unaudited.

Financial investments credit ratings

The sector analysis of the Group's financial investments portfolio by credit rating at 31 December 2024 is shown below:

	Total £m	%	AAA  £m	AA  £m	A £m	BBB  £m	% BBB £m	BB or below £m
Basic materials	109	0.4%	-	5	21	79	1.1%	4
Communications and technology	1,154	4.3%	117	223	162	652	9.4%	-
Auto manufacturers	85	0.3%	-	-	78	7	0.1%	-
Consumer staples (including healthcare)	1,226	4.5%	129	175	541	364	5.3%	17
Consumer cyclical	178	0.7%	-	4	47	127	1.8%	-
Energy	278	1.0%	-	67	5	175	2.5%	31
Banks	1,469	5.4%	51	108	908	402	5.8%	-
Insurance	745	2.8%	-	301	102	342	5.0%	-
Financial - other	590	2.2%	90	85	329	86	1.3%	-
Real estate including REITs	630	2.3%	30	16	289	245	3.6%	50
Government	3,081	11.4%	312	2,301	230	238	3.4%	-
Industrial	524	1.9%	-	105	155	254	3.7%	10
Utilities	2,452	9.1%	-	64	889	1,489	21.6%	10
Commercial mortgages	809	3.0%	89	323	281	116	1.7%	-
Long income real estate¹	1,808	6.7%	157	234	921	496	7.2%	-
Infrastructure	3,512	13.0%	57	367	1,246	1,829	26.5%	13
Other	43	0.2%	-	-	43	-	0.0%	-
Corporate/government bond total	18,693	69.2%	1,032	4,378	6,247	6,901	100.0%	135
Other assets	888	3.3%
Lifetime mortgages	5,637	20.9%
Liquidity funds	1,792	6.6%
Investments portfolio	27,010	100.0%
Derivatives and collateral	3,564
Gilts (interest rate hedging)	3,951
Total	34,525

1    Includes residential ground rents of £157m rated AAA.

 

NEW BUSINESS PROFIT RECONCILIATION

New business profit is deferred on the balance sheet under IFRS 17. In addition IFRS 17 provides clarification regarding the economic assumptions to be used at the point of recognition of contracts. Just recognises contracts based on their completion dates for IFRS 17, but bases its assessment of new business profitability for management purposes based on the economic parameters prevailing at the quote date of the business.

	Year ended 31 December 2024 £m	Year ended 31 December 2023  £m
New business CSM on gross business written	438	380
Reinsurance CSM	24	(37)
Net new business CSM	462	343
Impact of using quote date for profitability measurement	(2)	12
New business profit	460	355

 

GLOSSARY

Acquisition costs	Comprise directly attributable costs incurred in the selling, underwriting and commencing of insurance contracts.
Adjusted operating profit before tax	An APM, this is the sum of underlying operating profit and operating experience and assumption changes. The net underlying CSM increase is added back as the Board considers the value of new business is significant in assessing business performance. As such Adjusted operating profit is reported prior to the deferral of profit in CSM as defined below. Adjusted operating profit before tax is reconciled to IFRS profit before tax in the Business Review.
Adjusted profit/ (loss) before tax	An APM, this is the profit/(loss) before tax before deferral of profit in CSM and represents adjusted operating profit before tax plus the impact from non-operating items (investment and economic movement, strategic expenditure, and any adjustments to IFRS for transactions reported directly in equity).
Alternative performance measure ("APM")	In addition to statutory IFRS performance measures, the Group has presented a number of non-statutory alternative performance measures. The Board believes that the APMs used give a useful insight into the underlying performance of the Group. APMs are identified in this glossary together with a reference to where the APM has been reconciled to its nearest statutory IFRS equivalent. APMs regarding our Solvency position are reconciled to the Solvency II excess own funds. APMs which are also KPIs are indicated as such.
Buy-in	An exercise enabling a pension scheme to obtain an insurance contract that pays a guaranteed stream of income sufficient to cover the liabilities of a group of the scheme's members.
Buy-out	An exercise that wholly transfers the liability for paying member benefits from the pension scheme to an insurer which then becomes responsible for paying the members directly.
Care Plan ("CP")	A specialist insurance contract contributing to the costs of long-term care by paying a guaranteed income to a registered care provider for the remainder of a person's life.
Cash Generation	A Solvency II APM and represents underlying organic capital generation before the impact of new business strain and development costs and other.
Confidence interval	The degree of confidence that the provision for future cash flows plus the risk adjustment reserve will be adequate to meet the cost of future payments to annuitants.
Contractual Service Margin ("CSM")	Represents deferred profit earned on insurance products. CSM is recognised in profit or loss over the life of the contracts.
CSM amortisation	Represents the net release from the CSM reserve into profit as services are provided. The figures are net of accretion (unwind of discount), and the release is computed based on the closing CSM reserve balance for the period.
Deferral of profit in CSM	The total movement on CSM reserve in the year. The figure represents CSM recognised on new business, accretion of CSM (unwind of discount), transfers to CSM related to changes to future cash flows at locked-in economic assumptions, less CSM release in respect of services provided.
Defined benefit deferred ("DB deferred") business	The part of DB de-risking transactions that relates to deferred members of a pension scheme. These members have accrued benefits in the pension scheme but have not yet retired.
Defined benefit de-risking partnering ("DB partnering")	A DB de-risking transaction in which a reinsurer has provided reinsurance in respect of the asset and liability side risks associated with one of our DB Buy-in transactions.
Defined benefit ("DB") pension scheme	A pension scheme, usually backed or sponsored by an employer, that pays members a guaranteed level of retirement income based on length of membership and earnings.
Defined contribution ("DC") pension scheme	A work-based or personal pension scheme in which contributions are invested to build up a fund that can be used by the individual member to obtain retirement benefits.
De-risk	An action carried out by the trustees of a pension scheme with the aim of transferring risks such as longevity, investment, inflation, from the sponsoring employer and scheme to a third party such as an insurer.
Development costs	Incurred relating to the generation of incremental value (extending market reach or share) in future years, from developing existing products, markets, or new developments to the Group's technology and modelling capability, and additionally major business transformational projects related to generating incremental value in future years.
Drawdown (sales or products)	Collective term for investment products including Capped Drawdown.
Employee benefits consultant ("EBC")	An adviser offering specialist knowledge to employers on the legal, regulatory and practical issues of rewarding staff, including non-wage compensation such as pensions, health and life insurance and profit sharing.
Finance costs	Finance costs included within underlying operating profit include coupons paid on the Group's restricted Tier 1 notes, interest payable on the Group's Tier 2 and Tier 3 notes, facility non-utilisation fees and debt repurchase costs when incurred, and amortisation of debt issue and facility arrangement costs capitalised. Finance costs included in underlying organic capital generation include coupons paid on the Group's restricted Tier 1 notes, interest paid on the Group's Tier 2 and Tier 3 notes, and all facility costs when incurred. Debt issue and repurchase costs are excluded from underlying organic capital generation and included within capital actions when incurred.
Guaranteed Income for Life ("GIfL")	Retirement income products which transfer investment and longevity risk and provide the retiree with a guarantee to pay an agreed level of income for as long as the retiree lives. On a "joint-life" basis, the policy will continue to pay a guaranteed income to a surviving spouse/partner. Just provides modern individually underwritten GIfL solutions.
IFRS profit before tax	One of the Group's KPIs, representing the profit before tax attributable to equity holders.
In-force operating profit	An APM and represents profits from the in-force portfolio before investment and insurance experience variances, and assumption changes. It mainly represents expected release of risk adjustment for non-financial risk and of allowance for credit default in the period, investment returns earned on shareholder assets, together with the value of the (net) CSM amortisation.
Investment and economic movements	Reflect the difference in the period between expected investment returns, based on investment and economic assumptions at the start of the period, and the actual returns earned. Investment and economic profits also reflect the impact of assumption changes in future expected risk-free rates, corporate bond defaults and house price inflation and volatility.
Key performance indicators ("KPIs")	KPIs are metrics adopted by the Board which are considered to give an understanding of the Group's underlying performance drivers. The Group's KPIs are Retirement income sales (shareholder funded), New business profit, Underlying operating profit, IFRS profit before tax, Return on equity, Tangible net asset value per share, New business strain, Underlying organic capital generation and Solvency II capital coverage ratio.
Lifetime mortgage ("LTM")	An equity release product that allows homeowners to take out a loan secured on the value of their home, typically with the loan plus interest repaid when the homeowner has passed away or moved into long-term care.
LTM notes	Structured assets issued by a wholly owned special purpose entity, Just Re1 Ltd. Just Re1 Ltd holds two pools of lifetime mortgages, each of which provides the collateral for issuance of senior and mezzanine notes to Just Retirement Ltd, eligible for inclusion in its matching portfolio.
Medical underwriting	The process of evaluating an individual's current health, medical history and lifestyle factors, such as smoking, when pricing an insurance contract.
Net asset value ("NAV")	An APM that represents IFRS total equity, net of tax, and excluding equity attributable to Tier 1 noteholders.
New business margin	An APM that is calculated by dividing new business profit by Retirement income sales (shareholder funded). It provides a measure of the profitability of shareholder funded Retirement income sales.
New business profit	An APM and one of the Group's KPIs, representing the profit generated from new business written in the year after allowing for the establishment of reserves and for future expected cash flows and risk adjustment and allowance for acquisition expenses and other incremental costs on a marginal basis. The net underlying CSM increase from new business is added back as the Board considers the value of new business is significant in assessing business performance. New business profit is reconciled to adjusted profit before tax, which is reconciled to IFRS profit before tax in the Business Review.
New business strain	An APM and one of the Group's KPIs, representing the capital strain on new business written in the year after allowing for acquisition expense allowances and the establishment of Solvency II technical provisions and Solvency Capital Requirement.
No-negative equity guarantee ("NNEG") hedge	A derivative instrument designed to mitigate the impact of changes in property growth rates on both the regulatory and IFRS balance sheets arising from the guarantees on lifetime mortgages provided by the Group which restrict the repayment amounts to the net sales proceeds of the property on which the loan is secured.
Operating experience and assumption changes	Represents changes to cash flows in the current and future periods valued based on end-of-period economic assumptions. This is reported prior to the deferral of profit in CSM from changes to future cash flows.
Organic capital generation	An APM that is calculated in the same way as underlying organic capital generation, plus the impact of management actions and other items.
Other Group companies' operating results	The results of Group companies including our HUB group of companies, which provides regulated advice and intermediary services, and professional services to corporates, and corporate costs incurred by Group holding companies.
Pension Freedoms/Pension Freedom and Choice/Pension Reforms	The UK government's pension reforms, implemented in April 2015.
Peppercorn rent	A very low or nominal rent.
PrognoSys™	The Group's proprietary underwriting engine, which is based on individual mortality curves derived from Just Group's own data collected since its launch in 2004.
Regulated financial advice	Personalised financial advice for retail customers by qualified advisers who are regulated by the Financial Conduct Authority.
REITs	A Real Estate Investment Trust is a company that owns, operates, or finances income-generating real estate.
Retail	The Group's collective term for GIfL and Care Plan.
Retirement income sales (shareholder funded)	An APM and one of the Group's KPIs and a collective term for GIfL, DB and Care Plan new business sales "Sales" and excludes DB partner premium. Premiums are reported gross of commission paid.
Return on equity	An APM and one of the Group's KPIs. Return on equity is calculated by dividing underlying operating profit after attributed tax for the period by the average tangible net asset value for the period and is expressed as an annualised percentage. Underlying operating profit and tangible net asset value are reconciled respectively to IFRS profit before tax and IFRS total equity in the Business Review.
Risk adjustment for non-financial risk ("RA")	Allowance for longevity, expense, and insurance specific operational risks representing the compensation required by the business when managing existing and pricing new business.
Secure Lifetime Income ("SLI")	A tax efficient solution for individuals who want the security of knowing they will receive a guaranteed income for life and the flexibility to make changes in the early years of the plan.
Solvency II	Sets out regulatory requirements for insurance firms and groups, covering financial resources, governance and accountability, risk assessment and management, supervision, reporting and public disclosure.
Solvency UK	Covers the reforms to the Solvency II requirements for the UK and implemented by the PRA.
Solvency capital coverage ratio	One of the Group's KPIs. Solvency II capital is the regulatory capital measure and is focused on by the Board in capital planning and business planning alongside the economic capital measure. It expresses the regulatory view of the available capital as a percentage of the required capital.
Strategic expenditure	Are costs that deliver major regulatory change, the implementation of major strategic investment, new product and business lines and other restructuring costs.
Tangible net asset value ("TNAV")	An APM that comprises IFRS total equity attributable to ordinary shareholders, excluding goodwill and other intangible assets, and after adding back contractual service margin, net of tax.
Tangible net asset value per share	An APM and one of the Group's KPIs, representing tangible net asset value divided by the closing number of issued ordinary shares excluding shares held in trust.
Trustees	Individuals with the legal powers to hold, control and administer the property of a trust such as a pension scheme for the purposes specified in the trust deed. Pension scheme trustees are obliged to act in the best interests of the scheme's members.
Underlying earnings per share	An APM that is calculated by dividing underlying operating profit after attributed tax by the weighted average number of shares in issue by the Group for the period.
Underlying operating profit	An APM and one of the Group's KPIs representing new business profit, in-force operating profit, other Group companies' operating results, development costs and other, and finance costs. Underlying operating profit is reported prior to deferring new business profit to the CSM as the Board considers the value of new business is significant in assessing business performance. The Board believes the combination of both future profit generated from new business written in the year and additional profit from the in-force book of business, provides a view of the development of the business aligned to growth and future cash release. Underlying operating profit is reconciled to adjusted operating profit before tax, which is reconciled to IFRS profit before tax in the Business Review.
Underlying organic capital generation	An APM and one of the Group's KPIs. Underlying organic capital generation is the net movement in Solvency II excess own funds over the year, generated from in-force surplus, net of new business strain, cost overruns and other expenses and debt interest. It excludes strategic expenditure, economic variances, regulatory adjustments, capital raising or repayment and impact of management actions and other operating items. The Board believes that this measure provides good insight into the ongoing capital sustainability of the business. Underlying organic capital generation is reconciled to Solvency II excess own funds, which is reconciled to shareholders' net equity on an IFRS basis in the Business Review.