Just Group PLC on Thursday said it has completed its largest-ever defined-benefit pension de-risking deal, a £1.8 billion full buy-in with the trustee of the G4S pension scheme.
G4S is a London-based security services company. It was a London-listed FTSE 250 constituent before being acquired by US peer Allied Universal in 2021. The G4S pension scheme covers about 22,500 pensioners and deferred members.
Surrey, England-based Just Group provides retirement income products and services.
Just Group said it will reinsure 60%, or £1.1 billion, of the investment and longevity risks of the G4S deal via a subsidiary of Brookfield Wealth Solutions. It will retain 40%, or £700 million.
‘We continue to view funded reinsurance as complementary to our existing business,’ explained Chief Executive Officer David Richardson. ‘Our use has always been selective, with a combined about £2 billion of funded reinsurance across four transactions to date, representing less than 10% of our total annuity liabilities, each with a different counterparty.’
Just Group said the G4S deal doesn’t change the 2024 guidance that it provided with its interim results in August. This is for shareholder-funded new business volumes in the second half of the year to be similar to first half’s £2.5 billion, though with ‘slightly lower margins due to business mix’.
The company said it still expects in 2024 ‘to substantially exceed a doubling’ of its operating profit of £211 million in 2021. Underlying operating profit was £377 million in 2023, up 47% from £257 million in 2022.
Just Group shares were up 2.3% at 138.76 pence in London on Thursday.
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