Life insurer Just Group has signed a deal with The Reinsurance Group of America that will reduce its exposure to longevity risk, and the associated capital requirements, for Defined Benefit De-risking Solutions business.
Effective July 1, the agreement will see Just Group increase the proportion reinsured to 100% for all in-force DB schemes written between 1 January 2016 and 30 June 2019, and to 90% for most new DB business written from 1 July 2019 (including into the future).
Interim group Chief Executive Officer, David Richardson, said the deal has increased the group’s pro forma Solvency II surplus by £118m, more than offsetting the £70 million SCR adjustment for LTMs.
“We also have a number of further management actions available to us and in active preparation, which could be used to offset the eventual cost of the outcome of CP7/19,” said Richardson.
“This includes exploring the regulatory treatment of a no-negative equity guarantee (“NNEG”) risk transfer transaction.”
“The actions we have already taken have restored shareholder returns on new business to mid-teen levels and we will build on this progress.
“We are exploring a Defined Benefit De-risking (“DB”) 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.”











