Thursday 12 March 2020 9:05 am

Just Group swings to profit as chairman announces resignation

Insurer Just Group has posted an annual profit for 2019, as the retirement services specialist’s turnaround measures began to take effect. 

The company also announced this morning that chairman Chris Gibson-Smith will retire from the group as soon as a suitable successor is appointed. 

The figures

Just Group reported profit before tax of £369m for 2019, compared to an £86m loss the year before. The company said this turnaround was due to its improved operating result and the impact of positive economic variances.

Retirement income sales dropped 12 per cent to £1.9bn for the full year, compared to £2.2bn in 2018.

The group’s investment and economic division swung to a profit of £173.8m in 2019, up from losses of £252m the year before. Just Group said that it had benefited from a decrease in risk-free rates and a narrowing of credit spreads. 

The company said that a halving in new business strain had helped produce organic capital generation of £36m for the full year, compared to organic capital consumption of £165m in 2018. 

Just Group said it expects to be organically capital generative in 2020 and thereafter.

The company’s basic earnings per share for the year were 28.37p.

Shares in Just Group fell as much as 6.29 per cent in morning trading. 

Why it’s interesting

Just Group has been focusing on strengthening its capital position, and said it had made good progress in 2019. 

The company said its Solvency II capital coverage ratio increased from 136 per cent in 2018 to 141 per cent last year, boosted by £400m of new capital raised during 2019. 

It added that this ratio would have grown to 156 per cent if it had not recognised £219m of regulatory capital strengthening. 

The company did not declare a dividend for the year. 

What Just Group said

“We have a clear focus on improving the Group’s capital position and are making good progress. Despite operating in a tough environment we took big strides in 2019 to improve our organic capital generation and to reduce balance sheet risk,” said chief executive David Richardson. 

“We achieved organic capital generation in the second half of the year and at the same time have accelerated our adoption of the new regulatory requirements at a lower cost than previously expected.”

Richardson also said that working alongside Gibson-Smith had been “a privilege”.

“The entire Board benefitted from his insights and I have valued his wise counsel. He has steered the Group through some very challenging times and takes with him our best wishes for the future.”