Our business model

Our business model is strong and differentiated and is constructed to enable us to increase our access to customers, select profitable risks and use capital efficiently.

Our scalable operating model is focussed on growing our addressable market by increasing our access to customers and serving them profitably.

Multi-channel distribution

  • Multi-channel approach encompassing both traditional and emerging channels.
  • Strong relationships with financial intermediaries, partners and employee benefit consultants ("EBCs") to distribute our individual and corporate solutions.
  • Our corporate business HUB Financial Solutions provides professional services to businesses and their customers.
  • The Group’s market leadership in the retirement income markets positions us well in winning mandates to provide insurance companies with a range of insourced and outsourced services for their customers.

Highly automated underwriting

  • Fully automated and highly scalable underwriting systems, resulting in efficient data capture and turnaround times.
  • This differentiates our service delivery, and the benefits to financial intermediaries and corporate partners are reflected in our proud record of Financial Adviser 5 Star service awards.

Our Group is focused on delivering profitable growth.  We have superior capabilities to select the risks that help us focus on creating value for shareholders and delivering better outcomes for customers.

Next generation underwriting system: PrognoSysTM

  • Since 2011 we have enhanced our intellectual property (IP) further by developing the PrognoSysTM programme, our own specialist automated underwriting system.
  • This is a powerful tool for pricing and reserving that allows the Group to identify and price for the risks we want and provide improved outcomes for customers.

Experienced medical team and underwriters

  • A strong in-house medical team of epidemiologists, doctors and bio-statistical modellers has enabled us to develop superior pricing and reserving processes.
  • We benefit from a deep understanding of the whole spectrum of lifestyle, medical and behavioural factors and their impact on life expectancy.
  • Our experienced underwriters enable us to apply our proprietary IP in our pricing and reserving.

Unrivalled proprietary data

  • Our extensive database means we understand the likely impact of medical and lifestyle information on life expectancy.
  • Over 20 combined years of collecting, storing and synthesising detailed customer lifestyle and medical data gives us a significant competitive advantage.

The Group creates value by taking on those risks which we believe can be fairly rewarded.

Capital efficient model

  • Our synergistic suite of products results in an efficient and balanced use of capital.
  • The Solvency II regime came into effect on 1 January 2016 and Just Retirement Limited (JRL), the Group’s primary insurance business, was one of a small number of insurance companies to receive approval from the Prudential Regulation Authority (PRA) to use our own internally developed solvency model. The internal model enables us to calculate our capital requirements more accurately than a standard model and approval is only granted to companies who have met the PRA’s high standards.

Financial Risk Management

  • Our operating model is complemented by a conservative approach to risk management.
  • We have strong experience of delivering accurate longevity estimates coupled with prudent reserving.
  • The majority of longevity risk for both Defined Benefit and Guaranteed Income for Life business is held by high quality, international reinsurers.

Investment management strategy

  • Our investment policy enables us to provide attractive returns to customers and to optimise risk-adjusted returns for shareholders, while ensuring that cash flows from assets under management are sufficient to meet payment obligations to our GIfL and DB portfolios.
  • We follow an enhanced buy-and-maintain plus investment strategy whereby we purchase assets with attractive risk-reward characteristics and hold them to maturity to capture the full risk premium, particularly the illiquidity premium. We replace existing held-to-maturity assets where this makes sense, taking into account frictional costs.

The majority of our financial asset portfolio is held in investment grade, fixed income securities, such as government and corporate bonds.  We also invest in lifetime mortgages, private placements, commercial property mortgages and infrastructure loans.

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