On the go: Insurer Just Group is attempting to increase its presence in the bulk annuity market by partnering with external providers of capital backing.
Its half-yearly statement revealed it will build on its experience at the smaller end of the market to target larger £250m-plus defined benefit schemes that wish to derisk.
In the update published on September 4, David Richardson, Just Group Interim group chief executive officer, said: “We are exploring a defined benefit derisking partnering approach, which pairs our award-winning new business franchise with third-party balance-sheet capacity. This development would give us access to larger transactions, which we cannot currently target, in a capital-efficient way.”
He adds: “Initial feedback is encouraging and we have started to build a pipeline of potential transactions in what is shaping up to be a record year for the industry with over £30bn transactions expected across the sector.”
The interim results show that DB bulk annuity deals were £512.3m for the six months ended June 30 2019, down from £718.1m over the same period last year. Q2 2019 DB sales showed a strong recovery from the £26m of sales in Q1 2019, however, with the interim statement emphasising: “Our DB pipeline is strong and has multiple opportunities at various levels of completion.”
But economic headwinds dampened down profit in the first half of the year. Profit from new business was down 39 per cent to £74m for the first six months, which impacted on underlying operating profit, which was 27 per cent lower at £114m over the same period.
