Increased DB de-risking demand sees Just Group sales grow 33%

Defined benefit (DB) de-risking sales saw Just Group’s retirement income sales increase 17 per cent to £3.1bn in 2022, although the market for guaranteed income for life solutions was “more challenging” amid market volatility, according to the group's latest business update.

The group announced that DB sales were up 33 per cent to £2.6bn in the year, explaining that the rise in interest rates during 2022 had a positive effect on DB scheme funding positions, which led to a "very busy" second half of the year for Just.

In total, the group completed 56 transactions during the year, up from 29 in 2021, including its largest DB transaction to date, a £484m deal utilising our DB partnering model.

The group also predicted a continuation of this “strong growth momentum” in the new year, with a new business strain estimated at around 2 per cent.

It also stated that it is "confident" in achieving its expectations for FY 22 underlying operating profit growth, noting that the increase in interest rates has boosted in-force profits, but led to a lower new business margin.

The group also estimated 2022 industry volumes to be c£30bn, up from £27.7bn in 2021, with Just Group's share therefore expected to have grown to nearly 10 per cent, while the 56 deals completed in 2022 are expected to exceed a quarter of total market transactions.

However, the group clarified that the market for guaranteed income for life solutions was "more challenging", explaining that pension pots decreased in value due to falling equity and bond markets, which resulted in smaller case sizes.

Retail sales were therefore down 24 per cent as the group maintained pricing discipline and chose to instead deploy its available capital budget towards the heightened activity in the DB market.

More broadly, Just Group confirmed that it originated over £1bn of other illiquid assets, which is expected to support the increase in retirement income new business sales.

Commenting on the update, Just Group chief executive, David Richardson, stated: "Over the last three years we have delivered 18 per cent average sales growth per annum, demonstrating the strength of our new business model as we take advantage of our differentiated market positioning.

"We have significant untapped potential and a tremendous opportunity to achieve further material growth in the rapidly expanding DB market.

"Our proprietary bulk quotation service and repeat business programme help to overcome human capital constraints in the industry and therefore increase access to competitive DB pricing for many more pension schemes.

"The growth in our capacity to source illiquid investments and broadening of our reinsurance arrangements mean we are well positioned to transact on larger deals.

"I am very grateful for the remarkable effort from our colleagues during 2022. Once again, they provided outstanding service to our customers and distribution partners, enabling us to help more people achieve a better later life."

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