TE RTRMN SEILS

HELPING

CUSTOMERS

THE JUST WAY

Js gop PC | Ana Rpr ad acut 2022

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

OUR PURPOSE

We believe that every decision we

make and every action we take

should help us fulﬁl our purpose.

WE HELP PEOPLE

ACHIEVE A BETTER

LATER LIFE

INDIVIDUALS

We provide guaranteed income for life to deliver

security and peace of mind for our customers

and we provide regulated advice, guidance and

information services to help people make the

most of their pensions and other savings.

HOMEOWNERS

We provide the resources to improve the

later lifeof homeowners and their families.

PENSION SCHEME TRUSTEES

We provide improved security of income for

members of deﬁned beneﬁt pension schemes

bytransferring the risk to Just.

COMPANIES

We provide advisory, technology and customer

services to help UK companies with retirement-

focused solutions to meet the needs of their

customers and clients in later life.

All Just Group plc regulatory announcements,

shareholder information and news releases

can be found on our Group website,

www.justgroupplc.co.uk

FOR MORE INFORMATION ABOUT

EACH OF OUR STAKEHOLDERS SEE PG.4

COLLEAGUES AND CULTURE

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

STRATEGIC REPORT

1 Our purpose

2 Investment case

3 Financial and operational highlights

4 At a glance

6 Chair’s statement

8 Chief Executive Ocer’s statement

10 Market context

14 Business model

16 Strategic priorities

18 Deﬁned Beneﬁt case study

20 KPIs

22 Business review

32 Sustainability and the environment

34 Sustainable investment strategy

36 Sustainability strategy: TCFD

disclosure framework

44 Colleagues and culture

50 Relationship with stakeholders

52 Section 172 statement

57 Non-ﬁnancial information statement

60 Risk management

62 Principal risks and uncertainties

GOVERNANCE REPORT

66 Chair’s introduction to Governance

68 Board of Directors

72 Senior leadership

74 Governance in operation

83 Nomination and Governance

Committee Report

86 Group Audit Committee Report

92 Group Risk and Compliance

Committee Report

95 Directors’ Remuneration Report

115 Directors’ Report

119 Directors’ Responsibilities

FINANCIAL STATEMENTS

120 Independent Auditors’ Report

131 Consolidated statement of comprehensive

income

132 Consolidated statement of changes in equity

134 Consolidated statement of ﬁnancial position

135 Consolidated statement of cash ﬂows

136 Notes to the consolidated

ﬁnancial statements

184 Statement of changes in equity

of the Company

185 Statement of ﬁnancial position

of the Company

186 Statement of cash ﬂows of the Company

187 Notes to the Company ﬁnancial statements

190 Additional ﬁnancial information

193 Information for shareholders

195 Directors and advisers

196 Glossary and abbreviations

pg.18

pg.34

READ MORE ON PG.20

We are increasing organic capital

generation to fuel proﬁtable and sustainable

growth so we may reward shareholders.

DAVID RICHARDSON

Group Chief Executive Ocer

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

AWARDED FURTHER RECOGNITION FOR OUTSTANDING SERVICE

KEY PERFORMANCE INDICATORS

FINANCIAL AND OPERATIONAL HIGHLIGHTS

FINANCIAL STRENGTH AND OTHER INDICATORS

FITCH INSURER FINANCIAL

STRENGTH RATING

for Just Retirement Limited

(2021: A+)

FITCH ISSUER DEFAULT RATING

for Just Retirement Limited

(2021: A)

PENSIONS AGE FINANCIAL ADVISER:

5 Star service award

(Pension & Protection)

FINANCIAL ADVISER:

5 Star service award (Mortgages)

MORTGAGE SOLUTIONS

Best provider for adviser support,

training and development

10.7%

RETURN ON EQUITY

8.3% at 31 December 2021

£29m

UNDERLYING ORGANIC

CAPITAL GENERATION

£51m at 31 December 2021

£3,131m

RETIREMENT INCOME SALES

2021: £2,674m, up 17%

£233m

NEW BUSINESS

OPERATING PROFIT

2021: £225m, up 4%

£336m

ADJUSTED OPERATING

PROFIT BEFORE TAX

2021: £238m, up 41%

£249m

UNDERLYING OPERATING PROFIT

2021: £210m, up 19%

£(317)m

IFRS LOSS BEFORE TAX

2021: £(21)m

£153m

MANAGEMENT EXPENSES

2021: £147m, up 4%

£2,178m

IFRS NET ASSETS

2021: £2,440m, down 11%

199%

SOLVENCY II CAPITAL

COVERAGE RATIO (ESTIMATED)

1,2

164% at 31 December 2021

1 Alternative performance measure (unaudited, see glossary for deﬁnition). Underlying organic capital generation is reconciled to Solvency II excess own funds on page 27. Return on equity, new

business operating proﬁt, management expenses, underlying operating proﬁt, and adjusted operating proﬁt are reconciled to IFRS proﬁt before tax on pages 24 and 26.

Retirement Income sales are reconciled to gross premiums written in note 6 to the consolidated ﬁnancial statements on page 149.

2 Solvency II capital coverage ratios as at 31 December 2021 and 31 December 2022 include a recalculation of transitional measures on technical provisions (“TMTP”) as at the respective dates.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

AT A GLANCE

Leaders in our markets. We positively

disrupt markets where we can become a leader

and deliver great outcomes for customers

so we may deliver value for shareholders.

WE ARE A SPECIALIST IN OUR CHOSEN

MARKETS, SERVING FOUR DISTINCT GROUPS…

INDIVIDUALS: PROVIDING

RETIREMENT INCOME

People who have built up pension

savings throughout their career and

want a guaranteed income, ﬂexible

income or a combination in retirement.

>£1 trillion

market value of defined contribution

pension savings

CORPORATE CLIENTS: SOLVING

PROBLEMS FOR COMPANIES

We develop scalable retirement-focused

solutions for banks, building societies, life

assurance companies, pension scheme

trustees, other corporate clients and for

theircustomers, clients and members.

retirement-focused

solutions

TRUSTEES AND SCHEME SPONSORS:

PROVIDING MEMBER SECURITY AND

DE-RISKING PENSION LIABILITIES

Deﬁned beneﬁt pension schemes de-risking

their liabilities by securing member beneﬁts

with an insurance contract.

>£1 trillion

addressable market

HOMEOWNERS: ACCESSING

PROPERTY WEALTH

People aged 55+ who want to access

wealth locked up in their property.

>£3.5 trillion

Property wealth owned by people aged 55+

srtgc rpr GOVERNANCE FINANCIAL STATEMENTS

...WITH PRODUCTS AND SERVICES

Competitive position:

A leader

Developing

marketed

products

SERVICES BENEFIT AND COMPETITIVE POSITION

DEFINED BENEFIT DE-RISKING SOLUTIONS

(“DB”)

Solutions for pension scheme trustees to reduce

theﬁnancial risks of operating pension schemes

andincrease certainty that members’ pensions

willbepaid in the future.

Just’s innovative approach and underwriting expertise

inthis segment delivers competitive prices for trustees.

GUARANTEED INCOME FOR LIFE (“GIFL”)

A solution for individuals/couples who want the

securityof knowing they will receive a guaranteed

income for life.

By using our unrivalled intellectual property, Just provides

an individually tailored solution providing customers

typically with double-digit percentage increases in income

compared to standard products.

SECURE LIFETIME INCOME (“SLI”)

SLI is a tax-ecient solution for individuals who want

the security of knowing they will receive a guaranteed

income for life and the ﬂexibility to make changes in the

early years of the plan.

Just’s pioneering Secure Lifetime Income product enables

customers to select a guaranteed income from within a

Self-Invested Personal Pension. This enables a customer to

manage and blend their total pension assets tax eciently

within a single technology platform.

CARE PLANS (“CP”)

A solution for people moving to residential care who

want the security of knowing a regular payment will

bemade to the care provider for the rest of their life.

Just’s Care Plans can be tailored to the individual and oer

a tax-ecient solution to making payments to residential

care providers.

1 Reported in our

Insurance segment.

LIFETIME MORTGAGES (“LTM”)

Solutions designed for people who want to release

someof the value of their home.

By using our unrivalled intellectual property, Just provides

an individually tailored solution providing around six-in-ten

customers with a lower interest rate or a higher borrowing

amount compared to standard products. Just provides a

range of lifetime mortgages, enabling people to meet a

variety of needs in later life.

professional

services

SERVICES BENEFIT AND COMPETITIVE POSITION

HUB GROUP

Our professional services and distribution businesses

delivering technology, broking and advice solutions for

corporate clients and pension schemes. We also provide

regulated ﬁnancial advice on how people should use

pension, investment and savings, or release some of the

value from their homes.

HUB Financial Solutions oers an innovative approach

that provides aordable regulated advice to people

with modest pension savings. It also delivers

face-to-face nationwide advice at a time and place

to suit the client, and enables pension schemes to

deliver ecient and robust scheme-led deﬁned

beneﬁt transfer programmes.

2 Reported in our

Other segment.

Support for organisations wanting to deliver whole-of-

market shopping around services to source retirement

income products for their customers, employees or

pension scheme members. HUB Financial Solutions is

the UK’s largest GIfL broker.

Provides a range of business services tailored to the

needs of the organisation, ranging from consultancy

and software development to fully outsourced

customer service delivery and marketing services.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

CHAIR’S STATEMENT

HELPING CUSTOMERS

THE JUST WAY

We are providing certainty to our customers

in an uncertain world, delivering proﬁtable and

sustainable growth to fulﬁl our purpose

and create value for shareholders.

ANNUAL GENERAL MEETING 2023

10.00 am

9 May 2023

at Just Group plc

1 Angel Lane

London

EC4R 3AB

JOHN HASTINGS-BASS

Chair

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

I am pleased to introduce Just Group plc’s 2022

Annual Report. We have maintained our focus in

thisperiod. We have delivered sustainable growth

ofthe business, help to more of our customers and

value for shareholders.

HELPING OUR CUSTOMERS

The challenging economic events in the UK and around the world are

having profound impacts on the lives of our customers and their families.

We help people achieve a better later life, this is our purpose, it’s why we

exist. In these uncertain times, our solutions provide reassuring certainty

to our customers. As the retirement specialist we are doing all we can,

during these dicult times to help our customers and their families.

Our customers, existing and prospective, are at the heart of everything we

do at Just.

OVERVIEW

The primary focus of our Group in 2022 has been to capture proﬁtable

growth opportunities to ensure we meet our medium term proﬁt

growthpledge.

It has been a year of continued delivery, with successful strategic

execution,ongoing investment and continued growth. This has resulted

inastrong balance sheet and ﬁnancial performance, with continued

business momentum.

The Group’s ﬁnancial strength and performance is set out in detail in the

Business Review.

DIVIDEND

Given the Group’s performance and strong capital position, the Board has

recommended a ﬁnal ordinary dividend of 1.23 pence per share, in line

with our ordinary dividend policy.

BOARD COMPOSITION AND GOVERNANCE

Clare Spottiswoode Independent Non-Executive Director did not seek

re-election at last year’s AGM and stepped down from the Board on

10 May 2022. Steve Melcher, Independent Non-Executive Director retired

from the Board at the end of December. Paul Bishop, Independent

Non-Executive Director and Ian Cormack, Senior Independent

Director, will step down from the Board and not seek re-election at

this year’s AGM on 9 May 2023. I’d like to thank them for their long

service to Just Group and the predecessor companies. You can read

more about the Directors of the Company on pages 68 to 71.

I’d like to welcome Mary Phibbs as Independent Non-Executive Director,

who joined the Board on 5 January 2023. You can read her biography on

page 70.

I take great pride in leading the Board and the Group’s governance

function, and my introduction to the Corporate Governance Report on

page 66 provides further information on our governance and decision

making processes. I would like to thank the entire Board for their

signiﬁcant contribution, and look forward to working with them in 2023.

ACTING SUSTAINABLY

We were encouraged by the government’s consultation on the proposed

reforms of the Solvency II regime, published in November 2022. When

implemented these reforms could unlock billions of pounds of investment

from insurers into the UK economy and enable us to provide even more

competitive products to our customers.

Our industry has an important role to play in helping the world transition

towards a sustainable environment and low carbon global economy. We are

making good progress developing our plan to become carbon net zero. You

can read our high level transition plan on our Group website and this year’s

Annual Report provides a better understanding of climate-related risks and

opportunities. Our disclosures are consistent with those recommended by

theTaskforce on Climate-related Financial Disclosures and you can read more

on pages 36 to 43.

Growing the Just Way is a theme our colleagues across the Company are

active in shaping and the Board receives input from our colleagues. We are

on an exciting journey as a Company, as an industry, as a country and as

individuals. You can read more about our sustainability strategy on page 36

and at justgroupplc.co.uk.

ENGAGEMENT WITH OUR STAKEHOLDERS

The Board engages directly and indirectly with our customers, shareholders,

colleagues, regulators, legislators, professional bodies and wider society

topromote the interests of our customers more broadly. We place great

importance on working eectively with these groups and actively seeking

their feedback.

We work hard to ensure our customers beneﬁt from our services and our

shareholders receive the beneﬁt of long-term value creation. Throughout this

report you can read how the Board takes into consideration feedback from

the Company’s stakeholders and how the Board, and colleagues from across

the Group, promote the success of the Company.

PURPOSE DRIVEN

We are a purpose driven Company. We fulﬁl our purpose by providing

competitive products, services, ﬁnancial advice and guidance to help our

customers achieve security, certainty and provide them with peace of mind

in retirement. Our purpose remains as relevant today as it did all those years

ago when we created it. It’s clear, authentic and it acts as a beacon for

colleagues across the entire Group to live our purpose every day.

OUTLOOK

There are strong structural drivers of growth which make our markets very

attractive, including demographics and the appetite of company directors

and pension trustees to transfer the risk of operating deﬁned beneﬁt pension

schemes to insurance companies.

We have focused our leadership team on driving long-term proﬁtable growth.

The commercial outlook remains favourable for our Group.

On behalf of the Board, I would like to close by thanking David, his team and

all of our colleagues across the Group for their commitment to helping our

customers and doing such a great job. I’d also like to thank our business

partners who have trusted us to provide outstanding service to their clients.

We are helping our customers, building shareholder value through proﬁtable

and sustainable growth, fulﬁlling our purpose and helping contribute to a

netzeroeconomy. We are increasingly optimistic about the future.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

CHIEF EXECUTIVE OFFICER’S STATEMENT

ACCELERATING

GROWTH

We exceeded the promises made over

the last four years and we are very

optimistic about the future.

DAVID RICHARDSON

Group Chief Executive Ocer

£249m

UNDERLYING OPERATING PROFIT

2021: £210m, up 19%

£3.1bn

RETIREMENT INCOME SALES

2021: £2.7bn, up 17%

1 Alternative performance measure.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

I’m pleased to present my Chief Executive

Ocer’s Statement for 2022. We’ve delivered

a strong performance and have increased

conﬁdence in meeting our pledge to grow

underlying operating proﬁts over the medium

term by an average of 15% per annum.

RETIREMENT SALES GROWTH

Sales in 2022 were up 17% at £3.1bn. This was driven by growth in DB

sales, which were up 33% to £2.6bn (2021: £1.9bn). Operationally, we

were exceptionally busy as we completed 56 DB transactions, almost

double the number in 2021 (2021: 29 transactions). The rise in interest

rates has improved pension scheme funding levels materially. As a result,

DB de-risking market volumes were boosted in the second half of 2022,

with that momentum carrying into 2023. Our pipeline of DB business

is over £6bn and in March 2023 we announced our largest transaction

to date at £513m. We expect that our DB sales in 2023 will continue to

show substantial growth over the record levels achieved in 2022.

In our retail market, sales of GIfL and Care products at £564m were 24%

lower than in 2021. In a year of falling investment markets and a competitive

environment, we maintained a disciplined approach to pricing and returns.

However rising interest rates has stimulated increased customer appetite

for guaranteed income solutions, boosting quotation volumes. This augers

well for a return to growth in 2023.

GROWING OUR DEFINED BENEFIT DE-RISKING BUSINESS

AND EXPANDING OUR INVESTMENTS IN TANDEM

During the year we were delighted to host two seminars for investors and

analysts to develop their understanding of our growth potential.

We showcased our investment capability and explained how the investment

strategy delivers competitive customer pricing and shareholder returns.

During 2022 our investments in other illiquids, including infrastructure,

private placements, social housing, commercial mortgages, ground rents

and income strips, amounted to over £1bn (2021: £615m). Growth will

continue in 2023 as we access the fast developing investment opportunities

in private debt markets through our partnerships with 15external asset

managers. We were pleased with the government’s consultation response

to the proposed reforms of the Solvency II regime, published in November

2022. When implemented these reforms could unlock billions of pounds of

investment from insurers into the UK economy.

In our second seminar we highlighted the enormous growth potential in

ourDB business.

The development of the DB risk transfer market is relatively immature.

Todate, only 11% of total DB liabilities have been transferred from sponsors

to insurers. This is expected to accelerate in the coming years. Slowing

longevity increases and signiﬁcant employer contributions have led to a

steady improvement in DB pension scheme funding levels, and in 2022,

thiswas boosted by rising interest rates. This is translating into more

schemes bringing forward their de-risking plans which will further

increaseour addressable market.

We will drive growth by securing more larger transactions and by expanding

our leadership position in the smaller transaction size segment of the

DBmarket.

We are receiving increased enquiries from smaller schemes and to service

this demand eciently we have developed a streamlined quotation service.

This service delivers updated quotes each month to over 120 small and

mid-sized schemes. In 2022 we completed 28 transactions that originated

from our streamlined service.

We have written almost 300 DB transactions since entering the market

in2013 and through these, have gained signiﬁcant pricing and deal

experience to now regularly quote on larger transactions. This is supported

by our stronger capital position and expanded panel of reinsurance

partners. Combined with the strong outlook for the market in 2023, we

expect our participation in the larger deal segment to increase further.

CUSTOMERS AND OUR PURPOSE

As the Chair mentioned in his statement, the challenging economic

events in the UKand the volatility in investment markets witnessed

by our customers in 2022 has created uncertainty and worry for many

who have investments in equities and ﬁxed interest bonds. We provide

a guaranteed income for life to customers. This secure income is often

purchased to cover the essential expenditure of the household and in

these uncertain times, our solutions provide reassurance to customers.

As the retirement specialist we are doing what we can to help people.

We help them to discover whether they are entitled to State Beneﬁts

and often uncover many missed beneﬁts, that when secured, can make

a profound impact on their lives. We provide a range of professional

advice and guidance to help our customers. We can’t resolve all the

challenges faced by our customers, but we are helping where we are

able to do so and remain focused on living up to the purpose we set

out many years ago: we help people achieve a better later life.

SUSTAINABILITY

We achieve our goals responsibly and are committed to a sustainable

strategy that protects our communities and the planet we live on. I am very

proud that over the last three years we have reduced our operational carbon

intensity per employee by 81%, but the most material impact we can make

to reduce carbon emissions will be achieved through the decisions we take

with our £20bn investments portfolio (excluding derivatives and collateral).

During 2022, we invested in £279m of eligible green and social assets in

accordance with our Sustainability Bond Framework and we have now

completed our total £575m green and sustainability bond investment

commitments well ahead of schedule.

OUR PEOPLE

Our Just culture is underpinned by our people who are passionate and

arecommitted to making a dierence to the lives of those around them.

Akeybusiness priority is that all of our colleagues feel proud to work at Just.

The combination of our strong purpose and having highly engaged teams

working the ‘Just way’, is a competitive advantage which will help drive high

performance and our growth strategy.

I would like to thank my colleagues who once again rose to the challenge

in2022, providing support and certainty to our customers when they needed

it most. Our people have been energised and inspired by our commitment

tobe a strong and sustainable purpose-led business for our customers,

ourcolleagues and our planet.

We have continued to maintain excellent levels of employee engagement,

with a key priority to build a diverse and inclusive workforce. Further

detailson all our initiatives in this area can be found in the Colleagues

andCulture section.

FINANCIAL PERFORMANCE

Underlying operating proﬁt increased by 19% to £249m in 2022, helped by

improved in-force returns and lower ﬁnancing costs.

Our interest rate hedging programme has successfully protected our solvency

capital position during the years of falling interest rates. Thecontinued rise in

interest rates in 2022 has resulted in an economic loss,which means we have

an overall IFRS loss after tax of £232m for 2022 (2021: £16m).

The strength and resilience of our capital position and our disciplined pricing

and risk selection ensures we are capital self-sucient. This means we can

fund our growth ambitions, reward shareholders with a growing dividend

andmaintain a high buer of capital in what are uncertain times.

We will pay a ﬁnal dividend of 1.23 pence per share, giving a total of

1.73 pence for the year – which represents 15% growth over last year’s

pro forma full year dividend.

IN CONCLUSION

We have never been stronger. We have the capability and opportunities

toachieve our ambitious growth plans so that we build substantial value

forshareholders and fulﬁl our purpose to help more people achieve a better

later life.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

MARKET CONTEXT

HELPING CUSTOMERS

STRENGTHEN THEIR

FINANCIAL RESILIENCE

Structural drivers in our markets mean we

cangrowproﬁts sustainably while delivering

betteroutcomes for customers.

DEFINED BENEFIT DE-RISKING SOLUTIONS

Deﬁned beneﬁt pension schemes often called ﬁnal salary schemes, were

traditionally used in both the private and public sectors as an important

beneﬁt for employees. The employer shared some responsibility for the

wellbeing of their former workers when they retired by providing a

guaranteed retirement income based on their earnings history and length

ofemployment. However, providing these guaranteed beneﬁts became

expensive. Almost 90% of the UK’s Deﬁned beneﬁt pension schemes are

nowclosed to new members and/or accrual of future beneﬁts. Continuing

tooperate these schemes has become more onerous for employers.

TheDBDe-risking business has allowed these employers to alleviate the

ﬁnancial and operational challenges of running these schemes through

passing responsibility for the schemes to insurers who can fully or partially

de-risk theemployer’s deﬁned beneﬁt obligations.

Deﬁned beneﬁt de-risking can occur via a Buy-in or Buy-out. In a Buy-in, the

pension scheme pays a premium to an insurance company to purchase an

income stream that matches its deﬁned beneﬁt obligations to some or all

ofits members, but retains legal responsibility for those obligations. The risk

attached to that portion of the scheme is transferred to the insurer, with

schemes often de-risking over a period of time through multiple buy-in

tranches. An alternative is a Buy-out, where a pension scheme removes its

obligations by purchasing individual insurance policies to pay the beneﬁts

ofits members, who then become policyholders of the de-risking provider.

Subsequently, the pension scheme is wound down as the pension obligation

owed to each member has moved to the insurer.

As of 31 March 2022, total UK Deﬁned beneﬁt obligations owed by sponsors

were £2.1tn, or roughly the same size as the entire UK economy. There are

more than 5,100 deﬁned beneﬁt pension schemes in the UK. To date, we

estimate that only 11% of DB liabilities have been transferred to insurers via

de-risking transactions. Over the period, March 2017-22, the funding level

ofthe schemes on a full buy out basis has steadily increased from 63%

to79%, driven mainly by sponsor contributions.

CURRENT MARKET

2022 was a year of signiﬁcant ﬁnancial change for deﬁned beneﬁt

pensionschemes which had a major impact on the dynamics of the bulk

annuity market.

We estimate that since March 2022, rising gilt yield further improved the

funding level of schemes to c.90% on average, with half of all schemes fully

funded or better. Whilst many larger schemes will have signiﬁcant interest

rate hedging in place, all schemes beneﬁt to a varying extent from rising

interest rates. As interest rates rise the value of the deﬁned beneﬁt liabilities

fall more than the value of the assets held against them, which closes the

funding gap. Combined with improved pricing for longevity reinsurance and

widening credit spreads, Buy-out came into reach for an increasing number

of schemes. As a result, demand for de-risking increased, particularly in the

second half of 2022, with this strong momentum continuing into 2023.

In 2022 bulk annuity volumes are estimated to around £30bn for the

year(source: Just estimates), but with a continued shift towards full

schemetransactions.

COMPETITIVE FACTORS AND POTENTIAL ALTERNATIVE DE-RISKING SOLUTIONS

At present, there are eight providers of Buy-in and/or Buy-out transactions

inthe UK deﬁned beneﬁt market. These providers focus on some or all

segments of the market according to their preferred transaction size, risk

appetite, asset origination or reinsurance arrangements. Following the

introduction of the Solvency II capital regime in 2016, longevity reinsurance

iswidely used to reduce the capital requirements of writing bulk and

otherannuities.

The structural growth drivers for the

deﬁned beneﬁt de-risking market have

accelerated and the outlook for 2023

and beyond is exciting.

Closed to new members (open to beneﬁt accrual)

Source: The Purple Book 2021, PPF

Closed to future accrual 2022

89% o dfnd bnft pnin shms ae coe

t nw mmes ad icesnl t ftr acul (%)

100

2018 2019 2020 2021 20222007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Buy-in/Buy-out

Backbook acquisition

D D-rsig tascin (£b)

2017 2028 2019 2020 2021

2011

2012 2013 2014 2015 2016

Forecast range

Source: Just analysis, Hymans

2022

(forecast)

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

In June 2020 The Pension Regulator (“TPR”) issued guidance for trustees

andsponsoring employers considering transacting with alternative deﬁned

beneﬁt de-risking solutions. Regulation by TPR is outside of the insurance

regime and so these new alternatives including DB consolidators would oer

reduced protection for members compared to a fully protected and PRA

regulated insurance solution. So far, only one DB consolidator, Clara-Pensions,

has completed the TPR assessment process, however at the time of writing

have yet to transact. We welcome innovative solutions to the market, but

irrespective, we believe the scale of the market and strength of demand for

‘gold standard’ insurance solutions will mean that trustees and their

consultants will continue to prioritise the insurer pathway where possible.

WIDENING THE INVESTMENT OPPORTUNITY

Insurers cashﬂow match liabilities through the origination of a mix of

investment grade liquid and illiquid ﬁxed income assets. To oer attractive

new business pricing, insurers must have strong capabilities to originate

high-yielding, medium and long duration illiquid assets. Illiquid assets

aresplit between the lifetime mortgages that we originate and manage

ourselves and other illiquid assets, which includes a diverse range of

investments such as infrastructure debt, private placements, commercial

realestate mortgages, ground rents and income strips. The government’s

consultation response to the proposed reforms of the Solvency II regime,

published in November 2022, when implemented will widen asset eligibility

criteria. This could unlock billions of pounds of investment from insurers into

the UK. Insurer long term capital is particularly suitable for investments to

decarbonise the economy, develop aordable and social housing, to make

improvements to infrastructure and to support the UK’s world class science

and research capabilities.

We are continuing to invest in our

proposition and service to reduce the

impact on scarce human resources

andeliminate process friction.

Heightened government, regulatory and ﬁduciary focus alongside

consumeractivism has pushed environmental, social and governance

(“ESG”)considerations up the agenda for UK deﬁned beneﬁt pension

schemes. With new regulations for climate reporting introduced with

the Pensions Schemes Act 2021, more trustees considering de-risking

have sought assurance that ESG considerations underpin the asset

choices in insurers’ investment portfolios.

OUTLOOK

The structural growth drivers for the deﬁned beneﬁt de-risking market have

accelerated and the outlook for 2023 and beyond is exciting. The increase

ingilt yields has reduced the estimated liabilities of deﬁned beneﬁt pension

schemes and dramatically improved funding levels. Employee Beneﬁt

Consultants expect that this will translate into rising market volumes and

that demand will remain strong over the long term, with c.£600bn expected

to transact in the next decade, of which potentially more than £200bn

couldtransact in the three year 2023-25 period (source: LCP). Schemes who

ordinarily expected to be fully funded towards the middle of the decade have

been able to bring forward their de-risking plans.

Insurance capacity has kept pace with demand but the increased transaction

volumes forecast are likely to increase pressure on scarce human resources.

When selecting new business, insurers will triage the opportunities available

to them. As a result, small and medium size schemes targeting Buy-out must

have their governance, data and beneﬁt speciﬁcations in good order to secure

insurer engagement. Just Group is continuing to invest in its proposition

andservice to reduce the impact on scarce human resources and eliminate

process friction. This will increase the capacity to conduct more business.

89% OF DEFINED BENEFIT PENSION SCHEMES ARE CLOSED

TO NEW MEMBERS AND INCREASINGLY TO FUTURE ACCRUAL (%)

DB DE-RISKING TRANSACTIONS (£BN)

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

MARKET CONTEXT continued

INDIVIDUAL RETIREMENT INCOME MARKET

Guaranteed Income for Life (“GIfL”) products are bought by individual

customers to convert some or all of their accumulated pension savings into

aguaranteed lifetime retirement income. The solution provides people with

peace of mind from the security of knowing the income will continue to be

paid for as long as the customer and, where relevant, for as long as they or,

typically, their spouse, lives. In the UK, GIfL products traditionally oered an

income payable without reference to the individual’s health or lifestyle, and

were dierentiated only by reference to a limited number of factors such as

age, premium size and, prior to 31 December 2012, gender.

An individually underwritten GIfL takes into account an individual’s medical

conditions, personal and lifestyle factors to determine their life expectancy.

People who are eligible and purchase an individually underwritten GIfL

typically achieve double-digit percentage increases in income compared

topurchasing a GIfL which is not individually underwritten.

CURRENT MARKET AND OUTLOOK

Pension customers are encouraged to compare the GIfL oer provided by

their existing pension company to those oered on what is the open or

external market. In March 2018 the Financial Conduct Authority (“FCA”)

introduced rules requiring pension companies to provide customers with

acomparison to the best income available from the external market

alongside the quotation from the incumbent ﬁrm. These requirements were

subsequently strengthened and from January 2020 all ﬁrms are required to

provide a medically underwritten comparison where a customer is eligible.

This has provided new opportunities for Just Group as we compete in the

open market when these customers choose to shop around; this is our

addressable market as we do not have an existing base of pension savings

customers. The open market share of the total GIfL market for 2022 was

56.3% up from 54.2% in 2021 (source: Association of British Insurers (“ABI”)).

Continuing developments are driving growth over the medium term in our

addressable market:

• the structural drivers of growth in the retirement income market are

strong and assets accumulating in deﬁned contribution (“DC”) pension

schemes are projected to increase consistently over the next decade. This

growth arises from an increase in the number of people joining workplace

pension schemes as a result of the successful state auto-enrolment policy

and the increase in contribution rates implemented in 2018;

• growth in DC pension assets also arises as companies close down ﬁnal

salary or deﬁned beneﬁt pension schemes and oer their employees DC

pensions instead;

• some people are transferring out of deﬁned beneﬁt pension schemes

intoDC pension schemes to take advantage of Pension Freedoms. When

transferring, many people are choosing to secure a guaranteed income

for life, by using some of the transfer value to purchase an individually

underwritten GIfL;

• many life and pension companies are choosing to put in place broking

solutions to oer their pension savings customers access to the best

individually underwritten GIfL deals in the market. Some are choosing

totransfer their obligations to provide a guaranteed GIfL rate to their

customers to an alternative product provider or broking solution. This

grows our addressable market and provides customers with better

outcomes. Our HUB group of companies is providing many of these

corporate services; and

• following the rise in UK interest rates, the level of income on GIfL has

risenby around 50% in 2022. This has resulted in the volume of quotations

from ﬁnancial intermediaries and their clients for guaranteed income

solutionsto increase.

The number of individual retail customers transferring their pension beneﬁts

into deﬁned contribution pensions from their ﬁnal salary (deﬁned beneﬁt)

pension has reduced signiﬁcantly in the last few years. This reduction follows

a review and introduction of remediation measures by the FCA into the

quality of advice provided to individual retail customers exploring transferring

their beneﬁts. A proportion of the proceeds from these transfers are used to

secure a guaranteed income by investing in a GIfL. This reduction in activity

will be a drag on the positive growth factors above.

In 2020 the FCA announced they intend to complete further work on the

suitability of advice and associated disclosure (known as “Assessing Suitability

Review 2”). The review aimed focus on initial and ongoing advice to consumers

taking an income in retirement. This work was paused. In January 2023 the

FCA announced their intention to complete a thematic review assessing the

advice consumers are receiving on meeting their income needs in retirement.

The review will start in Q1 2023 and the FCA aim to publish a report setting

out their ﬁndings in Q4 2023.

The FCA will have greater rule making powers under the future regulatory

framework legislation. They have already announced that, to get ready for

these changes, they intend to carry out a holistic review of the boundary

between advice and guidance. Their aim is to understand where existing

regulation may carry a disproportionate burden, and to explore ideas to

reduce that burden, whilst continuing to provide the right level of consumer

protection. This may, over the medium term, result in more people receiving

help and guidance in how to use their pension savings, which may increase

the size of our addressable market.

LIFETIME MORTGAGES

A lifetime mortgage (“LTM”) allows homeowners to borrow money secured

against the equity in their home. The amount borrowed is repayable together

with accrued interest on the death of the last remaining homeowner or

theirmove into permanent residential care. This product can be used by

retirees tosupplement savings, top up retirement income or to settle any

outstandingindebtedness.

The typical lifetime mortgage customer is around 70 years old, has a house

valued at around £345,000 and borrows 30% of the property value.

People are becoming increasingly positively disposed to accessing some of

the equity in their homes to improve the quality of their later lives or to help

their family. The compound annual growth rate of the lifetime mortgage

market between 2011 and 2022 was 21% and this has attracted new

providers to enter the market in the last few years.

Just Group is a leading product provider of lifetime mortgages. Our HUB

Financial Solutions business is a leading distribution business providing

consumers with regulated advice on equity release solutions from across

themarket.

CURRENT MARKET AND OUTLOOK

Just Group expects Lifetime Mortgages to continue to provide an important,

but reducing proportion of the investments it uses to back its Retirement

Income new business liabilities. Homeowners aged over 55 are estimated

toown property wealth of over £3.5tn (source: ONS). We estimate that the

existing industry loan book including interest is just £43.4bn. In October 2022,

following the September 23 UK Growth Plan announced by the Chancellor,

anumber of product providers adjusted and/or removed their products as

themarkets faced a period of signiﬁcant interest rate volatility. This reduced

the products available to customers. Since the November 2022 Autumn

Statement many providers have returned to the market and the number of

products available to customers has increased.

Just Group introduced medical underwriting into a niche segment of the

lifetime mortgage market some years ago and in 2021 extended it across the

Just for You mortgage range. We estimate by collecting medical information

and lifestyle factors from applicants, we are able to provide six-in-ten a lower

interest rate, or for those who need it, a higher borrowing amount. This

market disruption is revolutionising how lifetime mortgages are advised.

Nme o pol (mlin) ae 60+

25.0% 26.2% 27.9% 28.9%

29.3% 30.7%

2022 2025 2030 2035

2040

2050

Source: Oce for National Statistics

% of UK

population

over age 60

CAGR 20.9%

Lump sum mortgage sales

Existing drawdown mortgages – further advances

Source: Equity Release Council

New drawdown mortgages – initial advance

Lftm mrgg mre sz ad got rt (£m)

6,000

5,000

4,000

3,000

2,000

1,000

2017 2018 2019 2020 2021 20222011 2012 2013 2014

2015

2016

2,000

2,500

1,500

1,000

500

2015 2016 2017 2018 2019 2020 2021 2022

Source: Just analysis, ABI

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

LIFETIME MORTGAGE MARKET SIZE AND GROWTH RATE (£M)

NUMBER OF PEOPLE (MILLIONS) AGE 60

A LEADER IN UK LONG-TERM

CARE FINANCIAL SOLUTIONS FOR

22 years

Just is forecasting that the LTM market will experience a period of stagnation

and potential decline in 2023, as the market and consumer demand adjusts

to increased interest rates and the potential property market impacts of

increased inﬂation. We forecast the market will return to growth in 2024 and

will exceed the £6.2bn recorded in 2022. The primary drivers of growth are:

• households wanting to top up their retirement income to improve their,

ortheir family’s standard of living in later life;

• people with outstanding interest-only mortgages who are entering

retirement and require a solution to settle the debt with the existing

mortgage company;

• strong demographic growth. The number of people aged 65 and over is

forecast to increase from around 13 million today to around 17 million by

2040; and

• strong investment in advertising which results in people becoming aware

of LTMs, combined with people becoming more disposed to using some of

their housing equity.

In October 2020 the FCA wrote to Chief Executive Ocers and board directors

of lifetime mortgage lenders and mortgage intermediaries. The FCA set out

their view of the key risks these ﬁrms pose to their consumers or the markets

in which they operate. They outlined their expectations of ﬁrms including how

ﬁrms should be mitigating these key risks. They described their supervisory

strategy and programme of work to ensure that ﬁrms are meeting the

regulators’ expectations and that any harms and risks of harm are being

remedied and/or mitigated.

The FCA stated they would be engaging with a number of ﬁrms across the

industry and that phase of work was due to conclude in May 2021. In June

2022 they wrote to ﬁrms providing an updated view of their expectations,

andkey risks posed by ﬁrms in this sector and their supervisory plans.

LONG-TERM CARE SOLUTIONS

Care Plans, or immediate needs annuities, are a form of purchased life

annuity. In exchange for an up-front premium, they provide a guaranteed

income for the life of the insured to help contribute to the cost of their care.

Under current rules this income is tax free when paid directly to a registered

care provider, with Care Plans available both to individuals entering care

facilities and receiving domiciliary support. As such, Care Plans provide a form

of longevity insurance to an individual against the ongoing costs of receiving

care until their death.

On 7 September 2021, the UK Prime Minister announced plans to substantially

increase funding for health and social care over the period (2022-2025), to be

funded by a new tax, the Health and Social Care Levy. From October 2023,

thegovernment had planned to introduce a new £86,000 cap on the amount

anyone in England will have to spend on their personal care over their

lifetime. The cap was to apply irrespective of a person’s age or income.

The government said that the publication of the November 2021 document

marked the start of a period of co-production of the statutory guidance with

the sector, building on draft regulations and guidance published in 2015.

Itadded that this would be followed by a public consultation early in 2022

with the intention that the ﬁnal regulations and guidance will be published

inspring 2022.

In the November 2022 Autumn Statement, the government announced a

delay to the national rollout of social care charging reforms from October

2023 to October 2025.

CURRENT MARKET AND OUTLOOK

There is a substantial market for care in the UK. The drivers of the need

for care are strong because:

• there are currently around 1.7 million people aged 85 or over in the

UK – this is the average age at which people go into care homes;

• this is the fastest growing demographic cohort, with its number

expected to almost double over the next 25 years, suggesting a

rate in excess of2.6%;

• 40% of all people in the UK aged 65 and over are estimated to have a

limiting long-standing illness, which may require care in the future; and

• the recent focus on pressures within the care sector has highlighted the

need to plan for care, and any government reform will provide additional

focus on the limited number of solutions currently available.

EXTERNAL GIFL MARKET (£M)

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

Our business model converts the growth opportunities

in our markets to deliver positive outcomes for

customers, shareholders and colleagues.

BUSINESS MODEL

KEY CHARACTERISTICS OF OUR BUSINESS MODEL

Product

innovation

Cost

Discipline

Risk

Selection

Specialist

focus

Scalable

operating model

Focus on

organic capital

generation

SHAREHOLDERS

By managing our resources eectively, we generate returns in excess

of our cost of capital. We manage our capital conservatively and

arefocused on increasing our underlying organic capital generation

to grow our business and service capital providers, enabling

sustainable dividends.

CUSTOMERS

We use our medical underwriting to fairly optimise the returns for

our customers. In addition, we strive to deliver the best experience

for our customers, making it as easy for them as possible to navigate

the complexities of later life planning and events. In addition, our

resilient business model ensures our customers can rely on us to pay

claims over the long term.

PARTNERS

Corporate clients: we create opportunities and solve problems

for companies using our scalable retirement-focused solutions.

Trustees and scheme sponsors: we provide member security

and de-risk pension liabilities.

COLLEAGUES

We develop, recognise and reward our colleagues to secure a skilled

and motivated team, with a focus on high-performance working.

ENVIRONMENT

We help the environment throughhow we operate and the

investment decisions we make, which align with our focused

sustainability strategy.

WE CREATE VALUE FORHOW WE CREATE VALUE

GROWTH OPPORTUNITIES

We have created a sustainable business model that organically generates

capital to support growth. We assess the risks related to the policies we sell

and how much income we expect to provide to our customers. We charge

amargin on the initial amount received in exchange for accepting the risk

over the lifetime of the policy. We invest the margin and our customers’

pension savings in high quality assets, including the lifetime mortgages we

originate. This generates ﬁnancial value whilst ensuring we are able to pay

policyholder pensions as they fall due.

We have a growing ageing population with evolving needs. The complexity

of retirement and therefore inertia amongst those approaching, at or

in-retirement provides us with signiﬁcant opportunity to help more

customers achieve a better later life through the products and propositions

we oer via our multi-channel distribution strategy.

Each and every current and future retiree will have a unique set of

circumstances and be exposed to a number of risks.

These risks include:

• their deﬁned beneﬁt pension scheme running into ﬁnancial diculty;

• running out of money;

• being unable to plan their ﬁnancial aairs;

• access to aordable ﬁnancial advice;

• increasing and uncertain care costs;

• not being able to achieve the lifestyle they had expected;

• being invested in inappropriate products and securities; and

• inﬂation outpacing their savings.

Our solutions service these needs, and our scalable and sustainable

business model is built to optimise value from those solutions.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

PRODUCTS AND SERVICES

Our products

and services are

distributed via our

multi-channel model.

INNOVATION

Innovatively utilising

reinsurance tools to

improve our capital

position

This includes:

• Deﬁned beneﬁt de-risking

partnering model.

• Reinsurance options on new

andexisting business.

• No-negative equity guarantee

hedge risk transfer solution.

INVESTMENT STRATEGY

Continuous evolution of our

investment strategy to generate

valuefor shareholders and better

value for customers

We invest in infrastructure loans, private

placements, commercial property mortgages

and social housing, as well as investment grade

ﬁxed income securities such as government and

corporate bonds. We originate lifetime mortgages

to provide matching cash ﬂows for longer duration

liabilities and to achieve a higher return than liquid

ﬁnancial assets. Read about our sustainable

investment strategy in the “Sustainable

investment strategy” section.

RISK SELECTION

Selecting the right risks and pricing

our products appropriately

PrognoSys™ is our powerful proprietary tool

for individual medical underwriting that

drivespricing and reserving that allows the

Group to identify and price for the risks we

want and to improve customer outcomes.

And because we operate in attractive

markets that are growing, this further

allows us to be selective in the risks we

choose to write.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

STRATEGIC PRIORITIES

Our growth ambitions are underpinned by our

ﬁnancial strength and the nearer term value

generated from our deﬁned beneﬁt business.

1. 2.

We continue to grow our business

sustainably to achieve our strategic

ambitions. We have maintained

ourfocus on capital whilst also

strengthening our focus on

transformation, customer, growth,

and innovation across the Group.

We are looking at more ways in

which we can help people in later

life during times of economic stress.

GROW

SUSTAINABLY

TRANSFORM

HOW WE WORK

GROW THROUGH

INNOVATION

GET CLOSER TO

OUR CUSTOMERS

AND PARTNERS

BE PROUD TO

WORK AT JUST

FOCUS

Continue to build proﬁtable and sustainable

growth over the medium term to maximise

opportunities available to us and build

shareholder value through the operation

ofasustainable capital model and

propositiondevelopment.

FOCUS

We have foundations in place and continue to

streamline and automate our operations across

the business, evolving our workplace; making it

ﬁtfor the future and the customers and partners

wesupport.

FOCUS

Develop our insight and evolve our customer

strategy to position our propositions to achieve

long-term success.

FOCUS

Invest in our propositions; enhancing our

existingservices to get closer to our customers

and partners.

FOCUS

Building a solid foundation to support the next

phase of our growth transformation.

2022 PROGRESS

• Completion of the property related

management actions and exposure

materially reduced. We have improved

ﬁnancial strength and resilience.

• We have the investment team, origination

capabilities and controls in place to deliver

£1bn+ pa of non-LTM illiquid origination to

support business growth.

• Our medically underwritten lifetime

mortgages are now a material business

segment and provide us with a competitive

advantage.

• Reﬂecting the progress made to improve

theresilience of the balance sheet, we are

broadly economically neutral on interest

rate movements up and down.

2022 PROGRESS

• Completion of our key deliverables in

retail digitisation and back oce.

• Creation of new technology capability

supportsfurther development within

our process automation ambitions.

• We continue to evolve operations within

our business lines and functions to be

able to service our customers for the future.

• Our new London property supports our

sustainability ambitions and has transformed

the hybrid working experience for our colleagues.

2022 PROGRESS

• We have executed and further established

ourDB partnering proposition through our

second deal.

• We have developed a single-tie Guaranteed

Annuity Rate proposition to support our

strategic partnerships in the marketplace.

• We use customer research and user-centred

design techniques to explore the needs of our

prospective and current retail customers to

determine how we might develop improved

customer solutions that solve their needs. This

enhanced understanding will further support

the intermediaries and partners we work with

through the innovative solutions we provide.

2022 PROGRESS

• We have introduced customer and partner

experience measures across the Group

enabling us to eciently measure and track

progress to ultimately improve the experience

and interaction with Just.

• Building on the success of the ﬁrst Just Group

Vulnerable Customer Awards, we hosted the

2022 Just Vulnerable Customer Awards, to

showcase business leadership and advisers

who support vulnerable customers.

• Over 12,000 intermediaries and other

colleagues have registered to use our

‘Consumer Vulnerability in Later Life’ online

training module, identiﬁed by the Financial

Conduct Authority as an example of good

practice and supporting our purpose to help

people achieve a better later life.

2022 PROGRESS

• We are a signatory to the Association of

British Insurer (“ABI”) Making Flexible

Work Charter, supporting ﬂexible working,

diversity and inclusion in the workplace.

• We successfully launched our

sustainability story.

• Our sta moved to a new London oce,

further supporting our sustainability

ambitionsas well as employee engagement

and wellbeing.

• We have embedded a hybrid working

approach, supporting ﬂexibility whilst

ensuring colleagues stay connected.

• We have implemented our employee wellbeing

strategy incorporating a range of initiatives,

with a particular focus on ﬁnancial wellbeing.

2023 FOCUS

• Continue to take advantage of the multiple

growth opportunities available to us whilst

being capital generative and preserving

economic value.

2023 FOCUS

• Continuation of our transformation initiatives

with a focus on enabling sucient scalability

across the Group.

2023 FOCUS

• Grow our DB business, enhancing our

propositions and scalability. Embed our

innovative retail solutions with our partners

and intermediaries.

2023 FOCUS

• Maturity of our customer experience

framework, setting new standards across the

Group. Combining the eorts of regulatory

driven and strategic initiatives to add value for

the end customer and support our partners.

2023 FOCUS

• Continue to drive our purpose led culture.

Building and leading high performing teams

and developing our capabilities.

LINK TO ONGOING RISKS:

a b c d e

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e f

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e f

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

Ongoing risks:

Market

Credit

Insurance

Liquidity

Conduct and

operational

Strategic

Risk outlook:

Political and regulatory

Climate and

environmental, social

and governance (“ESG”)

Cyber and technology

Insurance

Market

Liquidity

Strategic

PRINCIPAL RISKS AND UNCERTAINTIES

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

3. 4. 5.

GROW

SUSTAINABLY

TRANSFORM

HOW WE WORK

GROW THROUGH

INNOVATION

GET CLOSER TO

OUR CUSTOMERS

AND PARTNERS

BE PROUD TO

WORK AT JUST

FOCUS

Continue to build proﬁtable and sustainable

growth over the medium term to maximise

opportunities available to us and build

shareholder value through the operation

ofasustainable capital model and

propositiondevelopment.

FOCUS

We have foundations in place and continue to

streamline and automate our operations across

the business, evolving our workplace; making it

ﬁtfor the future and the customers and partners

wesupport.

FOCUS

Develop our insight and evolve our customer

strategy to position our propositions to achieve

long-term success.

FOCUS

Invest in our propositions; enhancing our

existingservices to get closer to our customers

and partners.

FOCUS

Building a solid foundation to support the next

phase of our growth transformation.

2022 PROGRESS

• Completion of the property related

management actions and exposure

materially reduced. We have improved

ﬁnancial strength and resilience.

• We have the investment team, origination

capabilities and controls in place to deliver

£1bn+ pa of non-LTM illiquid origination to

support business growth.

• Our medically underwritten lifetime

mortgages are now a material business

segment and provide us with a competitive

advantage.

• Reﬂecting the progress made to improve

theresilience of the balance sheet, we are

broadly economically neutral on interest

rate movements up and down.

2022 PROGRESS

• Completion of our key deliverables in

retail digitisation and back oce.

• Creation of new technology capability

supportsfurther development within

our process automation ambitions.

• We continue to evolve operations within

our business lines and functions to be

able to service our customers for the future.

• Our new London property supports our

sustainability ambitions and has transformed

the hybrid working experience for our colleagues.

2022 PROGRESS

• We have executed and further established

ourDB partnering proposition through our

second deal.

• We have developed a single-tie Guaranteed

Annuity Rate proposition to support our

strategic partnerships in the marketplace.

• We use customer research and user-centred

design techniques to explore the needs of our

prospective and current retail customers to

determine how we might develop improved

customer solutions that solve their needs. This

enhanced understanding will further support

the intermediaries and partners we work with

through the innovative solutions we provide.

2022 PROGRESS

• We have introduced customer and partner

experience measures across the Group

enabling us to eciently measure and track

progress to ultimately improve the experience

and interaction with Just.

• Building on the success of the ﬁrst Just Group

Vulnerable Customer Awards, we hosted the

2022 Just Vulnerable Customer Awards, to

showcase business leadership and advisers

who support vulnerable customers.

• Over 12,000 intermediaries and other

colleagues have registered to use our

‘Consumer Vulnerability in Later Life’ online

training module, identiﬁed by the Financial

Conduct Authority as an example of good

practice and supporting our purpose to help

people achieve a better later life.

2022 PROGRESS

• We are a signatory to the Association of

British Insurer (“ABI”) Making Flexible

Work Charter, supporting ﬂexible working,

diversity and inclusion in the workplace.

• We successfully launched our

sustainability story.

• Our sta moved to a new London oce,

further supporting our sustainability

ambitionsas well as employee engagement

and wellbeing.

• We have embedded a hybrid working

approach, supporting ﬂexibility whilst

ensuring colleagues stay connected.

• We have implemented our employee wellbeing

strategy incorporating a range of initiatives,

with a particular focus on ﬁnancial wellbeing.

2023 FOCUS

• Continue to take advantage of the multiple

growth opportunities available to us whilst

being capital generative and preserving

economic value.

2023 FOCUS

• Continuation of our transformation initiatives

with a focus on enabling sucient scalability

across the Group.

2023 FOCUS

• Grow our DB business, enhancing our

propositions and scalability. Embed our

innovative retail solutions with our partners

and intermediaries.

2023 FOCUS

• Maturity of our customer experience

framework, setting new standards across the

Group. Combining the eorts of regulatory

driven and strategic initiatives to add value for

the end customer and support our partners.

2023 FOCUS

• Continue to drive our purpose led culture.

Building and leading high performing teams

and developing our capabilities.

LINK TO ONGOING RISKS:

a b c d e

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e f

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

LINK TO ONGOING RISKS:

a b c d e f

LINK TO RISK OUTLOOK:

1 2 3 4 5

6 7

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

DEFINED BENEFIT DE-RISKING MARKET

CELEBRATING

10 YEARS OF HELPING

CUSTOMERS

We launched our deﬁned beneﬁt

solutions business in 2013 and in this

short time we’ve come a long way.

292

TRANSACTIONS COMPLETED

£12.8bn

VALUE OF TRANSACTIONS

COMPLETEDSINCE 2013

1-in-6

We’ve completed 1-in-6 of

the > 1,600

transactions

completed since 2013

1 Includes Just estimate of

transactions for H2 2022.

Annual transactions (left axis)

Cumulative transactions (right axis)

Js | D D-rsig tascin vle 2013-2022 (£m)

3,000

2,500

1,500

2,000

1,000

500

2019 2020 2021 20222013 2014 2015 2016 2017 2018

14,000

12,000

10,000

8,000

6,000

4,000

2,000

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

We’ve established a strong reputation with pension

scheme trustees, sponsors and professional advisers

and established a leading position in the small and

medium transaction size segments of the market.

Although we’ve successfully completed over 290

transactions and invested £12.8bn of members’ pension

savings, in many ways we’re just getting into ourstride.

We see signiﬁcant untapped potential to grow our

business and extend our franchise into additional

segments of the market.

READ MORE IN THE MARKET SECTION

It’shaving a material impact in this space, and has really helped to establish

our franchise with our target audience.

We receive member and scheme data directly from the trustee, or employee

beneﬁt consultant, and we agree a target price. Our streamlined service then

monitors our pricing, and when it aligns with the target price, we quickly

execute using standard terms. To date, we have completed 61 transactions

using this service. Some of these are repeat business, but for many schemes,

this will be their ﬁrst transaction with us.

FOCUSING ON THE MEMBER AND THE CLIENT GENERATES REPEAT BUSINESS

When we transact with a pension scheme – the transaction may be for a

small part of their overall scheme. Their de-risking journey often consists of

anumber of transactions over many years. We’ve developed a very strong

reputation with the schemes we’ve transacted with, for providing excellent

service, demonstrating ﬂexibility, and investing in our relationship with them.

This in turn has translated into real commercial beneﬁts, and the trustees of

these schemes often develop a preference for doing subsequent, or repeat

transactions with us.

We have completed 49 repeat transactions with our existing customers’,

andin the process we are building real franchise value. To bring that to

life,we’ve written £2.0bn of repeat transaction premiums. Those customers

initial transactions were £2.3bn. This is a very strong endorsement from the

trustees of our service and the member experience we provide at Buy-out

when members become policyholders of Just Group.

INVESTING IN THE UK

The £12.8bn of DB premiums we’ve secured have been invested to ensure

weachieve the predictable cash ﬂow required to pay the pensions of scheme

members. We’ve invested billions of pounds sustainably, across social

housing, utilities and infrastructure including oshore wind farms and solar.

These investments deliver value for pension scheme members and help to

support growth in the economy.

READ MORE ABOUT OUR INVESTMENTS ON PAGE 34

OUTLOOK

We are participating in a highly attractive market with long term growth

prospects. We have strong capabilities, an excellent reputation and a clear

strategy to achieve proﬁtable growth. We are increasingly optimistic about

the future.

ENTERING THE MARKET – HELPING THE CUSTOMER THE JUST WAY

We’ve always had strong innovation credentials, right back to the day when

we launched the Company. When we entered the deﬁned beneﬁt de-risking

market we used this innovation and underwriting expertise to create a point

of dierence in the market.

When we designed our service we were very clear – the pension scheme

member must come ﬁrst. We knew trustees would demand the best

outcome and service for their members. As the retirement specialist, we

haddeep insight into the needs of customers and a strong track record in

delivering outstanding service. This forensic focus on the member has been

amajor reason why trustees award new and repeat business to Just Group

and why we are conﬁdent in fulﬁlling our purpose.

THE EARLY YEARS AND CHANGING SHAPE OF THE MARKET

The majority of the business we completed in our earlier years was for

transactions known as a Buy-in. This is an insurance contract that pays a

guaranteed stream of income to the pension scheme trustees sucient

to cover the liabilities of a deﬁned group of members. These transactions

were for smaller pension schemes to cover the liabilities for members

whose pensions were already in payment. More recently, as pension

scheme funding has improved and pricing for deferred pensioners has

become more attractive, the market has moved towards full scheme

Buy-ins. These make up the majority of transactions we won during 2022.

AGILITY – ACCESSING A RANGE OF SOLUTIONS

We have to be agile and ﬂexible to meet the needs of our customers and

stakeholders. Because we know two transactions are never the same –

wehave developed a range of services and transaction structures.

One example is our partnering proposition that we have successfully used

totransact larger deals such as those we completed with the sponsors of

theAA and Barloworld pension schemes. Through our portfolio of reinsurance

partners we utilised funded reinsurance arrangements and this enabled us

tooptimise our use of capital with our ambition to grow sales.

CONTINUING TO INNOVATE

We’re never short of ideas at Just, we are always thinking how we can

disrupt markets to deliver better outcomes for our customers. One of

the main constraints in DB de-risking is human capital. Of the 5,000 plus

deﬁned beneﬁt pension schemes inthe UK, almost three quarters have

assets of less than £100m, and nearly 1,500 of these have assets less than

£10m. The key to increasing access for these smaller schemes to DB

de-risking, is to provide a very ecient solution.

Just is leading the way here through our innovative proprietary service.

We’vedeveloped and implemented a streamlined bulk quotation service.

OUR DEVELOPMENTS

2013

First deal

2015

First repeat transaction

2019

First DB partner deal

2018

First deal over £250m

2020

Deferred proposition

launched

2023

Our largest DB transaction

£513m full scheme Buy-in

for one of the Melrose Group

pension schemes

2022

2021

2020

2,674

2,145

3,131

7.9

8.3

10.7

2022

2021

2020

2022

2021

2020

2022

2021

2020

210

249

193

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

KEY PERFORMANCE INDICATORS

The Board has adopted the following metrics,

which are considered to give an understanding

of the Group’s underlying performance drivers.

These measures are referred to as key

performance indicators (“KPIs”).

The Board keeps KPIs under review to ensure they continue to reﬂect the

Group’s priorities and strategic objectives.

The balance of KPIs acrosscapital, sales, expenses, proﬁt and net assets.

reﬂect the Group’s focus on monitoring and controlling its costs and

growingcapital.

MEASURED AGAINST OUR STRATEGIC PRIORITIES

1 Alternative performance measure. Seeglossary on page 196 for deﬁnition.

2 Solvency II capital coverage ratios as at 31 December 2021 and 31 December

2022 include a recalculation of transitional measures on technical provisions

(“TMTP”) as at the respective dates.

SEE PAGE 16 FOR OUR STRATEGIC PRIORITIES

RETURN ON EQUITT

– 10.7%

Return on equity is underlying operating proﬁt after attributed tax for the

period expressed as a percentage of the average tangible net asset value

over the period, where tangible net asset value is IFRS total equity excluding

goodwill and other intangibles, net of tax, and excluding equity attributable

to Tier 1 noteholders.

UNDERLYING ORGANIC CAPITAL GENERATION/

(CONSUMPTION)

1,2

– £29M

Underlying organic capital generation/(consumption) is the net increase/

(decrease) in Solvency II excess own funds over the year, generated from

ongoing business activities, and includes surplus from in-force, net of new

business strain, cost overruns and other expenses and debt interest. It

excludes economic variances, regulatory adjustments, capital raising or

repayment and impact of management actions and other operating items.

The Board believes that this measure provides good insight into the ongoing

capital sustainability of the business.

RETIREMENT INCOME SALES

1

– £3,131M

Retirement Income sales include DB, GIfL and Care premiums written and

area key measure of the Group’s performance in these core product areas.

Retirement Income sales are reconciled to IFRS gross premiums in note 6

tothe consolidated ﬁnancial statements.

UNDERLYING OPERATING PROFIT

– £249M

Underlying operating proﬁt is calculated in the same way as adjusted

operating proﬁt before tax but excludes operating experience and

assumption changes.

LINK TO STRATEGIC PRIORITIES 1,3 LINK TO STRATEGIC PRIORITIES 1,3

LINK TO STRATEGIC PRIORITIES 3,4

1. Grow sustainably

2. Transform how we work

3. Grow through innovation

4. Get closer to our customers and partners

5. Be proud to work at Just

LINK TO STRATEGIC PRIORITIES 1,3

LINK TO STRATEGIC PRIORITIES 1,2

(21)

237

(317)

2022

2021

2020

2022

2021

2020

147

159

153

164

156

199

2022

2021

2020

2,178

2,440

2,490

2022

2021

2020

238

239

336

2022

2021

2020

2022

2021

2020

225

199

233

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

ADJUSTED OPERATING PROFIT

BEFORE TAX

– £336M

Adjusted operating proﬁt before tax is the sum of the new business

operating proﬁt and in-force operating proﬁt together with the impact

of one-o assumption changes, experience variances, results of

the other Group companies and ﬁnancing costs. The Board believes

that adjusted operating proﬁt, which excludes the eects of short-

term economic and investment changes, provides a better view

of the longer-term performance and development of the business

and aligns with the longer-term nature of the products. Adjusted

operating proﬁt is reconciled to IFRS proﬁt before tax on page 36.

MANAGEMENT EXPENSES

– £153M

Management expenses are the business as usual costs incurred and include

all operational overheads. They are calculated as other operating expenses

excluding investment expenses and charges and reassurance management

fees, which are largely driven by strategic decisions, and amortisation of

acquired intangible assets as these relate to merger and acquisition activity.

The use of this metric provides the Board with a better view of the Group’s

cost base and how they support both development and transformation

andbusiness as usual activities, ensuring that they are able to be carefully

monitored and controlled. Other operating expenses continue to be a useful

measure alongside management expenses. Management expenses are

reconciled to IFRS other operating expenses in note 4 on page 147.

IFRS (LOSS)/PROFIT BEFORE TAX – £(317)M

IFRS (loss)/proﬁt before tax represents the (loss)/proﬁt before tax attributable

toequity holders. The Group experienced investment and economic losses of

£639m in 2022 driven by £510m of losses from the increase in risk-free rates

during the period. The Group takes an active approach to hedging its interest

rate exposure. In the second half of 2021 and across 2022, as rates rose

andour solvency position strengthened, we gradually reduced the interest

rate hedging to a broadly economically neutral position. A reconciliation

ofthe operating proﬁt to statutory IFRS results is shown on page 26 in the

Business Review.

SOLVENCY II CAPITAL COVERAGE

RATIO

– 199% (ESTIMATED)

Solvency II capital is the regulatory capital measure and is focused on by the

Board in capital planning and business planning. It expresses the regulatory

view of the available capital as a percentage of the required capital.

IFRS NET ASSETS – £2,178M

IFRS net assets represents the net assets attributable to equity holders.

LINK TO STRATEGIC PRIORITIES 1

NEW BUSINESS OPERATING PROFIT

– £233M

New business operating proﬁt represents the proﬁt generated from new

business written in the year after allowing for the establishment of prudent

reserves for future expected annuity payments and maintenance expenses

and for acquisition expenses. Acquisition expenses include the commission

and trading costs, plus overhead costs, associated with writing new business.

New business operating proﬁt is reconciled to IFRS proﬁt before tax in the

Business Review.

LINK TO STRATEGIC PRIORITIES 1

LINK TO STRATEGIC PRIORITIES 1,3

LINK TO STRATEGIC PRIORITIES 1,3 LINK TO STRATEGIC PRIORITIES 1,3

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

BUSINESS REVIEW

STRONG AND

SUSTAINABLE GROWTH

Our strong capital base and compelling proposition

in the market provide us with a solid foundation

to deliver ongoing sustainable growth.

ANDY PARSONS

Group Chief Financial Ocer

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

The Group operates in attractive markets, with solid structural growth

drivers. By leveraging our strong capabilities, brand and reputation we are

well placed to take advantage of the expected boost in demand for our

products following the rise in long term interest rates during 2022. We will

continue to innovate, risk select and price with discipline, ensuring our

business model delivers long-term value for customers and shareholders.

The Business Review presents the results of the Group for the year ended

31 December 2022, including IFRS and unaudited Solvency II information.

The business continues to beneﬁt from the strong positive progress achieved

in previous years, in particular, a transformed, low capital intensity new

business model, combined with a strengthened and increasingly resilient

capital base. After right sizing the cost base, we continue to maintain strong

cost discipline across the business and are investing to enable the business

toscale eciently. We are also diversifying the asset portfolio backing our

customer commitments by originating an increasing proportion of illiquid

assets to back the new business in line with our investment strategy.

The DB business goes from strength to strength as the £5bn pipeline at the

half year stage translated into the strongest six months of DB sales on record

for Just. The drivers behind this momentum remain and we expect a very

busy 2023, as we execute on small, medium and larger transactions, while

maintaining pricing discipline and capital ﬂexibility. The steep rise in interest

rates during 2022 has had a positive impact as it further reduces DB scheme

funding deﬁcits, thereby making de-risking transactions more aordable.

Many schemes are already or approaching fully funded sooner than they had

expected, and hence able to accelerate their de-risking plans. Post year end,

in February 2023, we completed our largest transaction to date at £513m,

and have signed or are exclusive on a number of other medium sized deals.

In July, utilising our DB partnering model, we reinsured the investment as

well as longevity risks on just over half of a £484m transaction, our largest

deal of the year. After allowing for the upfront origination fee received from

our external reinsurance partner, this transaction created £24m of new

business proﬁt and was in aggregate marginally capital generative for Just.

This capital light transaction is an example of our innovation – it increases our

participation in the above £100m transaction size segment, where we have

signiﬁcant opportunity to grow, and generates upfront fee income to oset

new business capital strain. This type of transaction is repeatable, scalable

and provides optionality going forward, with employee beneﬁt consultants

(“EBCs”) supportive as the external capital increases overall market capacity.

During 2022, underlying operating proﬁt was £249m (2021: £210m), a rise

of 19%, ahead of our medium term annualised proﬁt growth target. Rising

interest rates during 2022 boosted the return on surplus assets, thereby

increasing in-force operating proﬁt, up 29% to £116m, while proactive

management of our debt proﬁle in September 2021 and November 2022 has

materially reduced ﬁnance costs. Shareholder funded Retirement Income

sales

of £3,131m were 17% higher than 2021, as a 33% increase in DB

business was oset by a 24% decline in GIfL/Care volumes. New business

proﬁt, which includes the DB partner origination fee, was up 4% at £233m

(2021: £225m), translating to a new business margin of 7.4% (2021: 8.4%)

on shareholder funded premiums. The higher interest rates that beneﬁted

the in-force operating proﬁt during the year, also reduces the size of each

individual DB transaction as well as reducing the new business margin.

The signiﬁcant rise, of c.275bps in long term interest rates during 2022 also

led to IFRS losses of £510m from hedges used to protect the Solvency II

balance sheet. These hedges had produced proﬁts as interest rates fell in

previous years. During the year, we actively reduced the level of interest rate

hedging as the capital position strengthened, with the sensitivity at year end

2022 now close to zero (c.£7m of IFRS proﬁt for a 100 basis point increase in

long term rates compared to £526m loss at year end 2021). Cumulatively

since 2018, we have incurred a net loss of £226m (pre-tax) on interest rate

hedging as proﬁts when rates fell in 2019/2020 were more than oset by

losses incurred as rates rose more signiﬁcantly over the past two years.

Othereconomic variances included negatives from widening credit spreads

(£112m) and property growth experience (£22m), which at 2% for the year

was a little below our long term 3.3% annual growth assumption (2021:

3.3%). We also incurred a £95m loss on asset timing variance, which is

expected to reverse as we acquire the desired asset mix during the ﬁrst

halfof 2023 and a £49m loss from the third and ﬁnal LTM portfolio sale in

February 2022. Taken together, these investment and economic losses of

£639m, when combined with other items led to an overall loss after tax for

the year of £232m (2021: loss of £16m).

The Group’s Solvency II capital position strengthened signiﬁcantly during the

year, increasing by 35 percentage points to 199% (31 December 2021: 164%

Rising rates drove most of the increase, by reducing the solvency capital

requirement (“SCR”) and risk margin, although this in turn leads to a smaller

unwind subsequently through in-force surplus. Despite reduced unwind

of capital following the rise in rates, underlying organic capital generation

(“UOCG”) during 2022 was robust at £29m (2021: £51m), marking three years

of positive underlying organic capital generation. Within this, capital strain

from writing new business increased to £60m, reﬂecting the signiﬁcantly

higher volumes of business written during the year. New business strain at

1.9% of premium (2021: 1.5% of premium) is based on target asset mix, with

any timing dierences taken as an investment variance. This low level of

newbusiness strain is due to our continued focus on strong pricing discipline,

risk selection and business mix. Sustainable growth through a capital self-

suciency business model continues to be a central pillar of how we run the

business. Furthermore, management actions were £15m (2021: £16m) and

other, driven by a longevity assumption change, was £90m. When added

to the UOCG this leads to a total of £134m of organic capital generation

(2021: £93m), which boosted the capital coverage ratio by 5 percentage

points. The solvency sensitivity to property was further reduced following

completion of our third and ﬁnal planned LTM portfolio sale in February 2022,

and remains within risk appetite. No further portfolio sales are anticipated.

Recognising the resilience and strengthened ﬁnancial position of the Group,

we recommenced dividends at FY 2021 and paid a £16m distribution to

shareholders during the year.

In 2023, as legislation is ﬁnalised within the Financial Services and Markets

bill, we expect further clariﬁcation from the PRA following HM Treasury’s

announcement to reform Solvency II and introduce a new Regulatory

Framework for ﬁnancial services following the UK’s exit from the European

Union. The Chancellor’s Autumn Statement in November very positively

outlined a 65% reduction in the risk margin (which will help to reduce

the size and volatility of the solvency balance sheet), measures to widen

eligibility criteria for matching adjustment assets, such as callable bonds or

assets with a construction phase where the commencement of cashﬂows

is not exactly certain, and no changes to the fundamental spread of the

matching adjustment, which remains a critical component of the Solvency

UK regulatory regime. We are very supportive of and keen to see swift

progress on the proposed reforms, which will better enable insurers to

support the economy and the government’s various agendas including

“levelling up”, decarbonisation and, increased investment in science and

technology. We await further detail on timing and implementation.

£336m

ADJUSTED OPERATING

PROFIT BEFORE TAX

2021: £238m, up 41%

199%

SOLVENCY II CAPITAL

COVERAGE RATIO

2021: 164%, up 35 percentage points

1.73p

DIVIDEND

Annualised 2021: 1.5 pence

per share, up 15%

1 Solvency II capital coverage ratios as at 31 December 2021 and 31 December 2022 include a recalculation of TMTP as at the respective dates.

2 The retirement income sales included in this new business margin has been calculated based on the July DB partnering premium after deducting the DB partner share.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

BUSINESS REVIEW continued

At this time, the outlook for the economy continues to evolve reﬂecting

geopolitical and other macro-economic concerns including the trajectory

ofinterest rates to reduce and control inﬂation, and associated slowing of

theUK and global economies. The key sensitivities of the Group’s capital and

ﬁnancial position to future economic and demographic factors are set out

below and in notes 17 and 23 of the ﬁnancial statements. We expect these

macro forces to have a negligible eect on the Group’s business model with

demand for our products boosted by higher interest rates. We have a low

strain new business model that is generating sucient underlying capital to

fund our ambitious growth plans, whilst also paying a shareholder dividend

that is expected to grow over time.

ALTERNATIVE PERFORMANCE MEASURES AND KEY PERFORMANCE INDICATORS

Within the Business Review, the Group has presented a number of

alternative performance measures (“APMs”), which are used in addition to

IFRS statutory performance measures. The Board believes that the use of

APMs gives a more representative view of the underlying performance of

the Group. The APMs used by the Group are: return on equity, Retirement

Income sales, underlying organic capital generation, new business operating

proﬁt, adjusted operating proﬁt before tax, underlying operating proﬁt,

management expenses, organic capital generation, in-force operating proﬁt,

adjusted earnings and adjusted earnings per share. Further information

on our APMs can be found in the glossary, together with a reference to

where the APM has been reconciled to the nearest statutory equivalent.

The Board has also adopted a number of key performance indicators (“KPIs”),

which include certain APMs, and are considered to give an understanding

of the Group’s underlying performance drivers. KPIs are regularly reviewed

against the Group’s strategic objectives to ensure that we continue to

have the appropriate set of measures in place to assess and report on

our progress. In addition, the return on equity (target 10%) and adjusted

earnings per share calculations have been updated to be consistent with

the 15% medium term growth metric, based on underlying operating proﬁt.

This reﬂects the Group’s focus on proﬁtable and sustainable growth, and

provide a balance of KPIs across proﬁt, sales, expenses, capital and net

assets. The Group’s KPIs are discussed in more detail on the following pages.

The Group’s KPIs are shown below:

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m Change

Return on equity

10.7% 8.3% 2.4pp

Retirement Income sales

3,131 2,674 17%

Underlying organic capital generation

29 51 (43)%

New business operating proﬁt

233 225 4%

Adjusted operating proﬁt before tax

336 238 41%

Underlying operating proﬁt

249 210 19%

IFRS loss before tax (317) (21) 15x

Management expenses

153 147 4%

31 December

2022

£m

31 December

2021

£m Change

Solvency II capital coverage ratio

199% 164% 35pp

IFRS net assets 2,178 2,440 (11)%

1 Alternative performance measure, see glossary. The return on equity (target 10%)

calculation has been updated to be consistent with the 15% medium term growth metric.

2 Solvency II capital coverage ratios as at 31 December 2021 and 31 December 2022 include a

recalculation of TMTP as at the respective dates.

RETURN ON EQUITY

The return on equity in the year to 31 December 2022 was 10.7% (2021: 8.3%),

based on underlying operating proﬁt after attributed tax of £202m (2021:

£170m) arising on average tangible net assets of £1,891m (2021: £2,048m).

Tangible net assets are reconciled to IFRS total equity as follows:

31 December

2022

£m

31 December

2021

£m

IFRS total equity 2,178 2,440

Less intangible assets (104) (120)

Less tax on amortised intangible assets 15 17

Less equity attributable to Tier 1 noteholders (322) (322)

Tangible net assets 1,767 2,015

Return on equity 10.7% 8.3%

UNDERLYING OPERATING PROFIT AND ADJUSTED OPERATING PROFIT BEFORE TAX

Underlying operating proﬁt is the core performance metric on which we have

based our target 15% growth, per annum, on average, over the medium

term. Underlying operating proﬁt captures the performance and running

costs of the business including interest on the capital structure, but excludes

operating experience and assumption changes, which by their nature

areunpredictable and can vary substantially from period to period. 2022

underlying operating proﬁt grew by 19% to £249m (2021: £210m), which is

avery solid start towards our medium term target, albeit year to year, the

trajectory may be inﬂuenced by timing dierences in relation to larger

DBtransactions.

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m

Change

New business operating proﬁt 233 225 4

In-force operating proﬁt 116 90 29

Other Group companies’ operating

results (15) (15) –

Development expenditure (12) (7) 71

Reinsurance and ﬁnance costs (73) (83) (12)

Underlying operating proﬁt 249 210 19

Operating experience and assumption

changes 87 28 211

Adjusted operating proﬁt before tax

336 238 41

1 New business operating proﬁt is reconciled to IFRS loss (via adjusting operating proﬁt before

tax) further in this Business Review.

New business operating proﬁt

New business operating proﬁt was up 4% at £233m for the year ended

31 December 2022 (2021: £225m), as shareholder funded Retirement

Incomesales rose 17% to £3,131m (2021: £2,674m). The new business

marginachieved on Retirement Income sales during the period was lower

at7.4% (2021: 8.4%). We are achieving similar spreads compared to the

prioryear, however, due to higher interest rates, the new business proﬁt

werecognise is now being discounted at a higher rate than the prior year,

andhence the margin is lower.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

Management expenses

Management expenses have increased by 4% to £153m for the year ended

31 December 2022 (2021: £147m). Following the end of a formal three year

cost reduction programme in 2021, management expenses continue to be

contained. We have maintained a sharp focus on cost control, with selective

investment in the business, such as the Investments and DB functions as

wecontinue to build in-house capability to write larger DB transactions on

amore frequent basis, and investing in the HUB Destination Retirement

business. Going forward, premium and business growth is expected to

outpace costs, thus further improving operational leverage.

In-force operating proﬁt

In-force operating proﬁt increased by 29% to £116m for the year ended

31 December 2022 (2021: £90m). Aside from the positive impact of credit

spread widening, the Group’s in-force operating proﬁt also beneﬁted from

theimpact of rising rates, which has boosted the return on surplus assets.

Other Group companies’ operating results

The operating result for other Group companies was a loss of £15m (2021:

loss of £15m). These costs arise from the holding company, Just Group plc,

and the HUB group of businesses.

Development expenditure

Development expenditure of £12m for the year ended 31 December

2022(2021: £7m), mainly relates to product development, proposition

enhancement and new initiatives. It also includes preparations for the

newinsurance accounting standard IFRS 17 and distribution improvements

such as online capability and digital access.

Reinsurance and ﬁnance costs

Finance costs have decreased by 12% to £73m (2021: £83m). These include

the coupon on the Group’s Restricted Tier 1 notes, as well as the interest

payable on the Group’s Tier 2 and Tier 3 notes. The decrease for the period is

due to the opportunistic reﬁnancing in September 2021 of the 2019 issued

Restricted Tier 1 bond, with a new £325m Sustainability Restricted Tier 1

bond. This discrete bond reﬁnancing reduced the interest costs on the

RT1component of the capital structure by £12m pre-tax per annum, while

alsolengthening the bond maturity to 2031. In November 2022, the Group

tendered for and cancelled £76m of 9% tier 2 debt due in 2026, which will

lead to additional interest savings in 2023 as the Group further optimises

itscapital structure and debt proﬁle.

During the ﬁrst half of 2022, the Group entered into a new ﬁve year revolving

credit facility, with improved commercial terms. The facility has increased

from £200m to £300m, with ﬂexibility for this to grow as the balance sheet

expands over time. This facility has not been drawn upon in 2022.

Operating experience and assumption changes

Over the past two years, the Group has actively continued to assess the

potential impact of COVID-19 on longer term mortality and has increasingly

incorporated COVID-19 experience data and medical understanding into

ourpricing and reserving assumptions, as it became available. As usual, the

Group carried out a full basis review in December 2022, and has updated its

longevity reserving using the CMI 2021 mortality tables (2021: CMI 2019) and

reviewing mortality rates experienced over the past three years. The Group

continues to allow for future improvements in long-term mortality, but

withnearer term mortality also reﬂecting the heightened mortality being

experienced post pandemic. Our assessment of the long-term impact of

thepandemic on the population, including the health of those who have

recovered from the disease, the future ecacy of the various vaccines

andsecondary impacts such as delayed diagnosis for other illnesses or

behavioural changes continues to evolve. However, these factors, combined

with the winter ﬂu season, longer NHS waiting lists and inﬂation pressures

onincomes are undoubtedly contributing to continued elevated deaths

across the population, which we have sought to reﬂect in our year end

assumption. There were a number of very minor changes to the Group’s other

assumptions in 2022. Sensitivity analysis is shown in notes 17 and 23, which

sets out the impact on the IFRS results from changes to key assumptions,

including mortality and property.

Overall, operating experience and assumption changes were £87m

(2021:£28m). The Group reported negative operating experience of £5m

in2022 (2021: positive £33m), as positive annuitant mortality experience

andmodelling adjustments were more than oset by increased early

redemptions within our LTM book, above our redemption assumption, as

customers took advantage of the competitive rates on oer to reﬁnance

before rates rose and thus reducing interest roll-up. Assumption changes

resulted in a £92m release (2021: £5m strengthening), and were almost

entirely driven by the mortality assumption change, as per above.

Adjusted operating proﬁt before tax

Adjusted operating proﬁt before tax, was £336m (2021: £238m). Adjusted

operating proﬁt before tax is the sum of underlying operating proﬁt and

operating experience and assumption changes.

On a statutory IFRS basis, the Restricted Tier 1 coupon is accounted for as

adistribution of capital, consistent with the classiﬁcation of the Restricted

Tier 1 notes as equity, but the coupon is included as a ﬁnance cost on an

adjusted operating proﬁt basis.

RETIREMENT INCOME SALES

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m

Change

Deﬁned Beneﬁt De-risking Solutions

(“DB”) 2,567 1,935 33

Guaranteed Income for Life Solutions

(“GIfL”) and Care Plans (“CP”) 564 739 (24)

Retirement Income sales 3,131 2,674 17

The structural growth drivers that underpin our markets are unchanged.

Shareholder funded Retirement Income sales for the year ended

31 December 2022 rose 17% to £3,131m (2021: £2,674m).

In early 2021, we expanded our proposition in the DB de-risking market

tomeet fully the needs of schemes and trustees by adding DB deferred

capability, which enabled us to increase our access to the c.£1.5tn DB market

opportunity. Prior to 2022, scheme funding levels across the industry had

been steadily improving primarily due to increased contributions from

sponsors, and therefore more schemes were able to aord full scheme

de-risking and buyout (with deferreds) as opposed to pensioner only

de-risking. During 2022, rising interest rates accelerated the funding gap

closure, which means that more schemes will commence the process

to be “transaction ready” and hence bring business forward into the 2023

and medium term pipeline from ordinarily expecting to transact in the

second half of the decade. Our eorts in 2021 were recognised by being

named “RiskManagement Provider of the Year” at the Pensions Age awards

in February 2022.

Shareholder funded DB sales were £2,567m, an increase of 33%. Activity

levels were signiﬁcantly ahead of the comparable period as we closed 56

transactions (2021: 29 transactions) aided by our proprietary bulk quotation

service and repeat business. This level of transaction activity is estimated

toreﬂect over a quarter of all transactions in the market – a very strong

endorsement of our DB new business franchise. In July, we completed a

£484m deal utilising our DB partnering model. Adding the £259m DB partner

premium to Just’s shareholder funded DB sales led to total DB market

volumes of £2,826m, up 46% on prior year.

We expect industry volumes for 2022 to be c.£30bn (2021: £27.7bn), and

therefore our market volume share to be close to 10%. Our conﬁdence in

substantial market growth in 2023 is underpinned by Lane Clark Peacock

(“LCP”) who anticipate that DB market volumes could exceed the record

£44bn achieved in 2019, while Willis Towers Watson expect in excess of

£40bn of Buy-in/Buy-out DB transactions. Our near term actively quoting

pipeline is over £6bn, and we expect a busy year with a greater number of

medium and large transaction opportunities coming to market. However, the

long-term growth opportunity is very substantial with LCP forecasting up to

£600bn of DB Buy-in and Buy-out transactions over the decade to 2032, as

funding deﬁcits in the largest schemes are closed. Indeed, over the next

three years, more than £200bn could transact, similar to the amount that

transacted during the last decade. We will take advantage of this very strong

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

BUSINESS REVIEW continued

market backdrop through our low strain new business model, which enables

us to fund our ambitious growth plans through underlying organic capital

generation, and utilising various forms of reinsurance through DB partnering.

When combined with our proven ability to originate high quality illiquid

assets, shareholder capital invested in new business adds substantially to

increasing the existing shareholder value.

GIfL sales fell by 24% to £520m (2021: £688m), due to a competitive market

and a decrease in the value of pension pots, which resulted in smaller

casesizes. Falling equity and bond markets, and economic uncertainty

demonstrate to customers the importance and security of a guaranteed

income. We maintained pricing discipline and used our insight to select the

most proﬁtable risks in a competitive market, while deploying the available

capital budget towards the heightened activity in the DB market. The rise in

long term interest rates has translated into increased customer rates which

has stimulated interest in guaranteed income relative to other forms of

retirement income. Year to date, quotation volumes are substantially higher

than 2022, which provides us with further optionality to deploy available

capital. We continue to invest in our distribution capability, with online

applications now available, which contributed towards our 18th consecutive

Five Stars at November’s Financial Advisor Service Awards. Care sales were

down 14% at £44m (2021: £51m) and remain subdued due to customer

behaviour changes post pandemic, with a further delay to October 2025

inrelation to proposed government initiatives on health and social

carefunding.

Other new business sales

2022 internally funded lifetime mortgage advances were £519m (2021:

£488m), an increase of 6%, with these in part used to replace an increased

level of back book LTM early redemptions. Going forward, our target LTM

backing ratio for new business has been revised downwards to 10-15%.

Relative to the spreads available on other illiquid assets, LTMs remain an

attractive asset class, however, in a higher interest rate environment, the

capital charge attaching to the NNEG risk becomes onerous.

We continue to be selective in the mortgages we originate, as we use our

market insight and distribution to target certain sub-segments of the market.

During 2021, we introduced medical underwriting across the entire lifetime

mortgage range and also signed an exclusive distribution agreement with

Saga, both of which are contributing to increasing volumes within the mix.

Increased investment in LTM digital capabilities and proposition has been

well received by ﬁnancial advisers.

ADJUSTED EARNINGS PER SHARE

Adjusted EPS (based on underlying operating proﬁt after attributed tax) has

increased to 19.6 pence (2021: 16.4 pence).

Year ended

31 December

2022

Year ended

31 December

2021

Adjusted earnings (£m) 202 170

Weighted average number of shares (million) 1,032 1,034

Adjusted EPS (pence) 19.6 16.4

1 Alternative performance measure, see glossary for deﬁnition. The adjusted earning

calculation has been updated to be consistent with the 15% medium term growth metric,

based on underlying operating proﬁt.

EARNINGS PER SHARE

Year ended

31 December

2022

Year ended

31 December

2021

Earnings (£m) (245) (82)

Weighted average number of shares (million) 1,032 1,034

EPS (pence) (23.7) (8.0)

1 Restated as explained in note 1.

RECONCILIATION OF OPERATING PROFIT TO STATUTORY IFRS RESULTS

The tables on the following pages present the Group’s results on a statutory

IFRS basis.

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m

Adjusted operating proﬁt before tax 336 238

Non-recurring and project expenditure (12) (15)

Investment and economic losses (639) (251)

Interest adjustment to reﬂect IFRS accounting for

Tier 1 notes as equity 16 25

Amortisation costs (18) (18)

IFRS loss before tax (317) (21)

Non-recurring and project expenditure

Non-recurring and project expenditure was £12m for the year ended

31 December 2022 (2021: £15m). This included the business process

transformation and increasing eciency by investing in automation and new

systems, across DB, retail and ﬁnance, which will lead to improved customer

service and long-term cost and control beneﬁts. This also includes the

support for Group internal model updates and other items.

Investment and economic losses

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m

Change in interest rates (510) (226)

(Wider)/narrower credit spreads (112) 57

Property growth experience (22) 56

Sale of LTM portfolio (49) (161)

Asset timing variance (95) 51

Other 149 (28)

Investment and economic losses (639) (251)

Investment and economic losses for the year ended 31 December 2022 were

£639m (2021: £251m loss). Losses from the increase in risk-free rates during

the period contributed £510m. The Group takes an active approach to

hedging its interest rate exposure. In the second half of 2021 and across

2022, as rates rose and our solvency position strengthened, we gradually

reduced the interest rate hedging to a broadly economically neutral position.

Our modiﬁed approach will allow the solvency position to ﬂuctuate as

interest rates move, but minimise the economic cost should rates rise further.

As noted above, the cumulative net interest rate loss from hedging the

Solvency II balance sheet since 2018 has been a net loss (pre-tax) of £226m.

Rising rates over the second half of 2022 helped the Solvency II capital

coverage ratio strengthen by a further 15 percentage points to 199%.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

We also incurred a £95m loss on asset timing variance, largely on

investments backing new business completed in December, which is

expected to reverse as we lengthen the duration of our assets to achieve

thetargeted asset mix during the ﬁrst few months of 2023 and a £49m loss

from the third and ﬁnal LTM portfolio sale in February 2022. Other notable

economic variances include a reﬁnement of LPI curve

methodology (£49m)

and the lack of corporate bond defaults oset by wider credit spreads (loss

of£112m) and negative property growth experience (loss of £22m).

1 Insurance liabilities for inﬂation-linked products and inﬂation-linked assets require an

assumption for future expectations of inﬂation. These assumptions are derived using a mark

to model basis. This represents a change in approach since 31 December 2021 which utilised

market prices that are not actively traded.

Further details and sensitivities to changes in property assumptions are given

in notes 17 and 23 of the ﬁnancial statements.

Amortisation of acquired intangibles

Amortisation of acquired intangibles for the year ended 31 December 2022

were £18m (2021: £18m), these mainly relate to the acquired in-force business

asset relating to Partnership Assurance Group plc, which is being amortised

over ten years in line with the expected run-o of the in-force business.

CAPITAL MANAGEMENT

Just Group plc estimated Solvency II capital position

The Group’s coverage ratio was estimated at 199% at 31 December 2022

after a formal recalculation of transitional measures on technical provisions

(“TMTP”), an increase of 35 percentage points, driven by the substantial rise

ininterest rates in 2022 (31 December 2021: 164% after a formal biennial

recalculation of TMTP). The Solvency II capital coverage ratio is a key metric

and is considered to be one of the Group’s KPIs.

Unaudited

31 December

2022

£m

31 December

2021

£m

Own funds 2,757 3,004

Solvency Capital Requirement (1,387) (1,836)

Excess own funds 1,370 1,168

Solvency coverage ratio

199% 164%

1 Solvency II capital coverage ratios as at 31 December 2021 and 31 December 2022 include

arecalculation of TMTP as at the respective dates.

The Group has approval to apply the matching adjustment and TMTP in its

calculation of technical provisions and uses a combination of an internal

model and the standard formula to calculate its Group Solvency Capital

Requirement (“SCR”).

Movement in excess own funds

The table below analyses the movement in excess own funds, in the year

ended 31 December 2022.

Unaudited

2022

£m

2021

£m

Excess own funds at 1 January 1,168 1,076

Operating

In-force surplus net of TMTP amortisation 174 191

New business strain

(60) (40)

Finance cost (57) (71)

Group and other costs (28) (29)

Underlying organic capital generation 29 51

Management actions and other items 105 42

Total organic capital generation

134 93

Non-operating

Dividend (16) –

Regulatory changes – (38)

Economic movements 117 56

Eect of Tier 2 debt buyback (2022) and RT1

reﬁnancing (2021), net of costs (33) (19)

Excess own funds at 31 December 1,370 1,168

1 All ﬁgures are net of tax, and include a recalculation of TMTP as at the respective dates.

2 New business strain calculated based on pricing assumptions.

3 Organic capital generation includes surplus from in-force, new business strain and other

expenses, interest and other operating items. It excludes economic variances, regulatory

changes, dividends and capital issuance.

Underlying organic capital generation

During 2022, we delivered £29m of underlying organic capital generation

(2021: £51m, 2020: £18m). The decrease was primarily due to the eect of

rising interest rates on the solvency balance sheet, which leads to a smaller

SCR and risk margin and hence unwind into the In-force surplus net of TMTP

amortisation, an increase in new business strain reﬂecting higher volumes

ofnew business, both oset by lower ﬁnancing costs. The business continues

to deliver sucient ongoing capital generation to support decisions on capital

deployment between proﬁtable growth, providing returns to our capital

providers and further investment in the strategic growth of the business.

Underlying organic capital generation continues to beneﬁt from the ongoing

focus across the business on minimising new business capital strain. During

2022, new business strain increased by £20m to £60m, which represents

1.9% of new business premium (2021: 1.5%), well within our target of below

2.5% of premium. This outperformance was driven by continued pricing

discipline and risk selection, including DB deferred business and a greater

weighting towards small and medium transactions within the sales mix.

Dueto careful management of the capital budget in the ﬁrst half of the year,

we deployed capital in the seasonally busier second half of the year. We expect

seasonality to be less pronounced in 2023, given that the DB market could

potentially be a record year as a result of scheme funding deﬁcits closing

orbeing eliminated due to the rise in interest rates over the past 12 months.

In-force surplus after TMTP amortisation was down 9% to £174m, primarily

due to higher interest rates which reduces the amount of capital available

(via lower SCR and risk margin) to release and the cumulative eect of the

three LTM portfolio sales, which were more capital intensive than the assets

that replaced them. Group and other costs including development, non-

recurring and non-life costs were £28m (2021: £29m), reﬂecting strong cost

control. Finance costs at £57m (2021: £71m) were 20% lower reﬂecting a

reduced coupon on the RT1 debt, after the opportunistic early re-ﬁnancing of

that debt in September 2021. Interest costs will fall further in 2023 following

the £76m tier 2 debt tender completion in November 2022. Management

actions at £15m (2021: £16m) further augment underlying organic capital

generation and are combined with assumption changes including mortality

into management actions and other items, which contributed a total of

£105m to the capital surplus. Adding underlying organic capital generation

and management actions and other items led to a total of £134m from

organic capital generation, which added 5% to the capital coverage ratio.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

BUSINESS REVIEW continued

Non-operating items

Within the surplus, property value movements led to a £18m negative due to

actual property price growth of c.2% (compared to our annual 3.3% long term

growth assumption) on our individually updated portfolio. Other economic

movements included a positive £137m to the surplus as both the SCR (£436m)

and the Own Funds (£299m) fell due to higher interest rates. This interest

rate movement led to a strengthening of the capital coverage ratio by 30

percentage points, with asset trading and various positive other economic

variances having minimal impact on the coverage ratio. This includes a lower

than anticipated impact from the third LTM portfolio sale as we reinvested

the proceeds in other illiquid assets and the positive impact from high

inﬂation indexation and no corporate bond defaults during the year. The

Tier 2 debt buyback in November 2022 led to a £33m reduction in capital

surplus as the £76m nominal that was bought back was partially oset by

the release of capital tiering restrictions. In 2022, the Group recommenced

a shareholder dividend, which cost a total of £16m during the year.

Sensitivities to economic and other key metrics are shown in the table below.

Estimated Group Solvency II sensitivities

1,5

Unaudited % £m

Solvency coverage ratio/excess own funds at

31December 2022

199 1,370

-50 bps fall in interest rates (with TMTP

recalculation) (13) (88)

+50 bps increase in interest rates (with TMTP

recalculation) 13 79

+100 bps credit spreads (with TMTP recalculation) 8 31

Credit quality step downgrade

(8) (107)

+10% LTM early redemption 1 13

-10% property values (with TMTP recalculation)

(12) (135)

-5% mortality (10) (136)

1 In all sensitivities the Eective Value Test (“EVT”) deferment rate is allowed to change

subject to the minimum deferment rate ﬂoor of 2.0% as at 31 December 2022 (0.50%

asat31 December 2021) except for the property sensitivity where the deferment rate is

maintained at the level consistent with base balance sheet.

2 Sensitivities are applied to the reported capital position which includes a TMTP recalculation.

3 Credit migration stress covers the cost of an immediate big letter downgrade (e.g. AAA to

AAor A to BBB) on 10% of all assets where the capital treatment depends on a credit rating

(including corporate bonds, ground rents/income strips; but lifetime mortgage senior notes

are excluded). Downgraded assets are assumed to be traded to their original credit rating, so

the impact is primarily a reduction in Own Funds from the loss of value on downgrade. The

impact of the sensitivity will depend upon the market levels of spreads at the balance sheet.

4 After application of NNEG hedges.

5 The results do not include the impact of capital tiering restriction.

Reconciliation of IFRS total equity to Solvency II own funds

Unaudited

31 December

2022

£m

31 December

2021

£m

Shareholders’ net equity on IFRS basis 2,178 2,440

Goodwill (34) (34)

Intangibles (70) (86)

Solvency II risk margin (456) (759)

Solvency II TMTP

874 1,657

Other valuation dierences and impact on

deferred tax (304) (987)

Ineligible items (50) (3)

Subordinated debt 619 781

Group adjustments – (5)

Solvency II own funds

2,757 3,004

Solvency II SCR

(1,387) (1,836)

Solvency II excess own funds

1,370 1,168

1 Solvency II capital coverage ratios as at 31 December 2021 and 31 December 2022 include

arecalculation of transitional measures on technical provisions (“TMTP”) as at the respective

dates.

Reconciliation from regulatory capital surplus to reported capital surplus

31 December

2022

£m

31 December

2022

31 December

2021

£m

31 December

2021

Regulatory capital

surplus 1,370 199 1,168 164

Notional

recalculation of TMTP – – – –

Reported capital

surplus 1,370 199 1,168 164

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

HIGHLIGHTS FROM CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVEINCOME

The table below presents the Condensed consolidated statement of

comprehensive income for the Group, with key line item explanations.

Year ended

31 December

2022

£m

Year ended

31 December

2021

£m

Gross premiums written 3,391 2,676

Reinsurance premiums ceded (271) (23)

Net premium revenue 3,120 2,653

Net investment expense (4,778) (130)

Fee and commission income 14 16

Share of results of associates (3) –

Total (expense)/revenue (1,647) 2,539

Net claims paid (1,210) (1,141)

Change in insurance liabilities 2,935 (1,039)

Change in investment contract liabilities 3 (1)

Acquisition costs (56) (49)

Other operating expenses (209) (193)

Finance costs (133) (137)

Total claims and expenses 1,330 (2,560)

Loss before tax (317) (21)

Income tax 85 5

Loss after tax (232) (16)

Gross premiums written

Gross premiums written for the year ended 31 December 2022 were £3,391m,

an increase of 27% (2021: £2,676m). As discussed above, this reﬂects overall

higher new business premiums, as shareholder backed DB and DB partner

business combined led to a 46% increase in DB business oset by a 24%

reduction in GIfL/Care business.

Reinsurance premiums ceded

Reinsurance premiums ceded (expense of £271m) has increased in 2022

asaresult of reinsurance in relation to the Group’s DB partner transaction

mentioned above.

Net investment expense

Net investment expense increased to £4,778m (2021: £130m). The main

components of net investment expense are interest earned and changes in

fair value of the Group’s corporate bond, mortgage and other ﬁxed income

assets. There has been an increase in risk-free rates during the period, which

has resulted in unrealised losses in relation to assets held at fair value. We

closely match our assets and liabilities, hence ﬂuctuations in interest rates

will cause similar movements on both sides of the IFRS balance sheet. We

also actively monitor and had hedged interest rate exposure to reduce the

eect of interest rate movements on the Solvency II capital position, but with

this creating IFRS losses as interest rates rose. We have progressively reduced

our hedging of the Solvency II interest rate exposure over the year and by the

end of 2022 were broadly economically neutral to interest rates up and down.

Net claims paid

Net claims paid increased to £1,210m, (2021: £1,141m) reﬂecting the

continuing growth of the in-force book.

Change in insurance liabilities

Change in insurance liabilities was £2,935m (2021: £(1,039)m). The increase

isprincipally due to an increase in the valuation interest rate due to the rise

inrisk-free rates noted above.

Acquisition costs

Acquisition costs have increased to £56m (2021: £49m), driven by the 6%

increase in internally funded LTM origination.

Other operating expenses

Other operating expenses have increased to £209m (2021: £193m) driven

byhigher investment management fees due to our signiﬁcantly increased

origination of illiquid assets, which have higher fees, but also diversify our

investments portfolio, support new business pricing and optimise back

bookreturns.

Finance costs

The Group’s overall ﬁnance costs decreased to £133m (2021: £137m). Note

that the coupon on the Group’s Restricted Tier 1 notes is recognised as a

capital distribution directly within equity and not within ﬁnance costs.

Income tax

Income tax for the year ended 31 December 2022 was a credit of £85m (2021:

credit of £5m). The eective tax rate of 27.0% (2021: 26.4%) is 8% higher than

the standard 19% corporation tax rate. This is due to the current year’s losses

being carried forward at 25% as opposed to the current tax rate of 19%.

HIGHLIGHTS FROM CONDENSED CONSOLIDATED STATEMENT OF

FINANCIALPOSITION

The table below presents selected items from the Condensed consolidated

statement of ﬁnancial position, with key line item explanations below. The

information below is extracted from the statutory consolidated statement

ofﬁnancial position.

31 December

2022

£m

31 December

2021

£m

Assets

Financial investments 23,477 24,682

Reinsurance assets 2,287 2,808

Other assets 1,350 858

Total assets 27,114 28,348

Share capital and share premium 199 199

Other reserves 948 948

Accumulated proﬁt and other adjustments 711 973

Total equity attributable to ordinary

shareholders of Just Group plc 1,858 2,120

Tier 1 notes 322 322

Non-controlling interest (2) (2)

Total equity 2,178 2,440

Liabilities

Insurance liabilities 18,333 21,813

Reinsurance liabilities 306 275

Other ﬁnancial liabilities 5,250 2,866

Insurance and other payables 263 93

Other liabilities 784 861

Total liabilities 24,936 25,908

Total equity and liabilities 27,114 28,348

Financial investments

During the year, ﬁnancial investments decreased by £1.2bn to £23.5bn (2021:

£24.7bn). Accommodative central bank and ﬁscal stimulus during 2021 led

tocredit spread narrowing, however, in 2022, various government asset

purchase programmes in response to the pandemic started to be gradually

unwound. At the same time, central banks raised base rates from their

historical low levels to counteract the eect of inﬂation. The interest rate

increases are predicted to cause a shallow recession in 2023 followed by a

gradual recovery, and this backdrop led to wider spreads during the year.

Theeect of credit spread widening and increases in risk-free rates, both of

which reduce the value of the assets was partially oset by investment of the

Group’s new business premiums. The credit quality of the corporate bond

portfolio remains resilient, with 50% of the Group’s corporate bond and gilts

portfolio rated A or above (31 December 2021: 54%), with the reduction due

to lower government investments (see overleaf). Year to date, credit spreads

have narrowed as the UK and global economic outlook relative to forecasts

continues to improve. Our diversiﬁed portfolio continues to increase by issuer

and is well balanced across a range of industry sectors and geographies.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

BUSINESS REVIEW continued

Similar to 2021, credit rating agencies continue to maintain a cautious

approach. We continue to position the portfolio with a defensive bias,

andin2022 have experienced ratings stability as 9% of the Group’s bond

portfoliowas upgraded, oset by 8% being downgraded. The Group

continues to have very limited exposure to those sectors that are most

sensitive to structural change or macroeconomic conditions, such as auto

manufacturers, consumer (cyclical), basic materials, energy and real estate

(including REITs). The BBB-rated bonds are weighted towards the most

defensive sectors including utilities, communications & technology, and

infrastructure. Reﬂecting this bias, the Group has further increased its

infrastructure allocation and selectively added to utilities and commercial

ground rent & income strips investments, with some rotational changes

asinparticular we reduced BBB exposure to communications & technology,

industrials, auto manufacturers and energy. Following a reclassiﬁcation,

“Financial – other” now includes short and medium term illiquid assets

including SME lending, commodity trade ﬁnance and others.

During 2022, we originated £1,031m of long term other illiquid assets (2021:

£615m), via our roster of specialist asset managers, in addition to funding

£519m of lifetime mortgages (2021: £488m). Our investments model

demonstrated its ﬂexibility and capabilities as we achieved our target illiquid

new business backing ratio of c.50%. We have the ﬂexibility to adjust the

asset class allocations, and in 2022, increased our origination of private

placements as credit spreads widened, mirroring the public markets. This

ﬂexibility enables us to support new business pricing and optimise back

bookreturn whilst maintaining strict credit underwriting. Entering 2022,

Government investments were elevated as the Group temporarily invested

excess cash, which was further added to by the third LTM portfolio sale in

February 2022. Excess cash and gilts were recycled into other corporate

bonds and illiquid assets during 2022 as opportunities arose.

At year end, the Group had ample liquidity. We continue to prudently manage

the balance sheet by hedging all foreign exchange and inﬂation exposure,

while managing interest rate, credit and NNEG risk. As previously mentioned,

and reﬂecting the strengthened capital position of the Group, the interest

rate hedging was neutralised during the second half of the year. The eect

ofthe hedging was to protect the solvency ratio, but caused economic losses

when rates rose and proﬁts when rates fell. Without hedging, interest rate

movements will impact the solvency balance sheet, but not IFRS and

therefore, we expect that, in future, the IFRS result will be more closely

aligned to the operating performance of the business.

The loan-to-value ratio of the mortgage portfolio was 37.3% (31 December

2021: 36.1%), reﬂecting continued strength and resilience across our

geographically diversiﬁed portfolio, which osets the interest roll-up. Lifetime

mortgages at £5.3bn represent 26% of the investments portfolio and reﬂects

completion of the third and ﬁnal LTM portfolio sale in February 2022. In total,

the Group has disposed of £1.6bn of lifetime mortgages as part of our

objective to reduce the sensitivity of the capital position to house price

movements, which at a 12% capital coverage ratio impact for an immediate

10% fall in UK house prices is at a level we are comfortable with. Further

portfolio sales are not envisaged as the property sensitivity is expected to be

contained within risk appetite through maintaining NNEG hedges on c.20%

ofthe portfolio and a new business backing ratio of 10-15%.

Other Illiquid assets and Environmental, Social and Governance investing

To achieve its optimal mix of assets backing new business, and to further

diversify its investments, the Group originates other illiquid assets including

infrastructure, real estate investments and private placements. Income

producing real estate investments such as ground rents and income strips

are typically much longer duration and hence the cash ﬂow proﬁle is very

beneﬁcial, especially to match DB deferred liabilities.

To date, Just has invested £3.3bn in other illiquid assets, representing 16% of

the investments portfolio (excluding derivatives and collateral, 31 December

2021: 13%), as we make continued progress towards our 25% medium term

target, driven by new business backing. We have invested in our in-house

credit team as we have broadened our illiquid asset origination, and we work

very closely with our specialist asset managers on structuring to enhance our

security, with a right to veto on each asset. We anticipate that the upcoming

Solvency II reforms, when implemented, will increase the investment

opportunities available to us to provide long term capital that helps to

underpin UK economic growth and productivity. In particular, widening the

eligibility criteria for matching adjustment assets to include assets with a

construction phase where the commencement of cashﬂows is not exactly

certain is a very welcome development. We are pleased that these reforms

can provide support to insurance ﬁrms to fund the government’s various

agendas including increased investment in infrastructure, science and

research and decarbonising the economy.

Many of the other illiquids are invested in a range of ESG assets including

renewable energy, social housing and local authority loans. During 2022, we

invested a further £279m in eligible green and social assets (2021: £146m),

and have now completed our total £575m green and social asset allocation

commitment arising from the green and sustainability bonds issued in

October 2020 and September 2021 respectively. The allocations were spread

across 23 green and social investments comprising renewable energy, social

housing and green buildings. The Green/Sustainability bond full allocation

report is available on www.justgroupplc.co.uk/investors/esg.

The following table provides a breakdown by credit rating of ﬁnancial

investments, including privately rated investments allocated to the

appropriate rating.

31 December

2022

£m

31 December

2022

31 December

2021

£m

31 December

2021

AAA 1,939 8 2,448 10

AA and gilts 1,986 8 3,194 13

A 5,968 25 4,384 18

BBB 6,500 28 6,500 26

BB or below 455 2 388 1

Unrated/other 1,363 6 414 2

Lifetime mortgages 5,306 23 7,423 30

Total

23,517 100 24,751 100

1 Includes units held in liquidity funds.

2 Includes investment in trust which holds ground rent generating assets which are included

in investment properties in the IFRS consolidated statement of ﬁnancial position.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

The sector analysis of the Group’s ﬁnancial investments portfolio is shown

below and continues to be well diversiﬁed across a variety of industry sectors.

31 December

2022

£m

31 December

2022

31 December

2021

£m

31 December

2021

Basic materials 270 1.3 264 1.1

Communications and

technology 1,327 6.5 1,430 6.0

Auto manufacturers 250 1.2 319 1.3

Consumer (staples

including healthcare) 1,012 5.1 1,174 4.8

Consumer (cyclical) 142 0.7 187 0.8

Energy 535 2.6 633 2.6

Banks 1,120 5.5 1,192 11.3

Insurance 607 3.0 845 3.5

Financial – other 956 4.7 481 2.0

Real estate including

REITs 437 2.1 661 2.8

Government 1,596 7.8 2,415 10.1

Industrial 622 3.1 920 1.2

Utilities 2,266 11.0 2,302 9.6

Commercial

mortgages 584 2.9 678 2.8

Ground rents 291 1.4 263 1.1

Infrastructure 1,811 9.0 1,474 6.1

Other 42 0.2 38 0.2

Corporate/

government bond

total 13,868 68.1 15,276 63.6

Lifetime mortgages 5,306 26.1 7,423 30.9

Liquidity funds 1,174 5.8 1,311 5.5

Investments portfolio 20,348 100.0 24,010 100.0

Derivatives and

collateral

3,169 741

Total

23,517 24,751

1 Includes direct ground rents and also an investment in a property unit trust which holds

ground rent generating assets which are included in investment properties in the IFRS

consolidated statement of ﬁnancial position.

2 More than 99% of the derivative assets are comprised of interest rate swaps, foreign

exchange swaps to hedge the currency risk on non-GBP investments, and inﬂation swaps.

Inaddition, collateral in the form of corporate bonds and cash has been posted in relation

tothe Group’s hedging activity. Further details are available in note 16 and note 28 of the

ﬁnancial statements. Derivatives are used to manage risks on the balance sheet, and we

seek to be economically neutral on interest rate, currency and inﬂation risks. The derivatives

and collateral total has increased primarily due to an increased number of positions as part

of our dynamic interest rate hedging strategy. Interest rate swap assets have accounted

forthe vast majority of the increase, as they rose by £1,238m to £1,408m, while foreign

exchange swaps rose by £170m to £413m, and inﬂation swaps rose by £176m to £438m. In

relation to the interest rate, foreign exchange and inﬂation derivative assets, compensating

increases in the swap liability positions means that the overall swap exposure in relation

tothese categories is limited to a net liability of £722m (2021: net asset £291m). Increased

collateral requirements from the hedging activity drove the increase in deposits with

creditinstitutions (2022: £908m, 2021: £53m), and is almost all in relation to interest rate

swaps. Combining the 2022 net derivative liability and deposits held at credit institutions

(predominantly collateral) is a net asset of £186m (2021: net asset of £343m). Other

swapassets and liabilities are negligible. In accordance with accounting standards these

derivatives are not oset. Given that the net asset/liability is not represented in the ﬁnancial

investments total on the balance sheet, to aid comparability, the percentage of ﬁnancial

investments does not include derivatives and collateral.

Reinsurance assets and liabilities

Reinsurance assets decreased to £2.3bn at 31 December 2022 (2021: £2.8bn)

due to the increase in the valuation rate of interest over the period. Since

theintroduction of Solvency II in 2016, the Group has increased its use of

reinsurance longevity swaps rather than quota share treaties for shareholder

funded business, albeit the DB partnering business is written via quota share.

Reinsurance liabilities relate to liability balances in respect of the Group’s

longevity swap arrangements.

Other assets

Other assets increased to £1.4bn at 31 December 2022 (2021: £0.9bn).

Theseassets include cash, investment in associate, deferred tax assets,

insurance receivables and intangible assets.

Insurance liabilities

Insurance liabilities decreased to £18.3bn at 31 December 2022 (2021:

£21.8bn). The decrease in liabilities arose from the new business premiums

written during the year, which was more than oset by an increase to the

valuation rate of interest over the period.

Other ﬁnancial liabilities

Other ﬁnancial liabilities increased to £5.3bn at 31 December 2022 (2021:

£2.9bn). These liabilities mainly relate to collateral deposits received from

reinsurers, together with derivative liabilities and other cash collateral

received. The increase from the prior year relates to higher amounts of

derivatives and collateral, given the market volatility.

Other liabilities

Other liability balances decreased to £784m at 31 December 2022 (2021:

£861m) due to the £76m repayment of the Tier 2 debt.

IFRS net assets

The Group’s total equity at 31 December 2022 was £2.2bn (2021: £2.4bn).

Total equity includes the Restricted Tier 1 notes of £322m (after issue costs)

issued by the Group in September 2021. Including negative eects of

Solvency II interest rate hedging on the IFRS results, total equity attributable

to ordinary shareholders decreased from £2,120m to £1,823m resulting in

netasset value per ordinary share of 179 pence (2021: 204 pence).

DIVIDENDS

In line with our stated policy to grow the dividend over time, the Board is

recommending a ﬁnal dividend of 1.23 pence per share bringing the total

dividend for the year ended 31 December 2022 to 1.73 pence per share,

representing a 15% increase on the annualised dividend (2021: 1.0 pence,

recommenced dividend and represents a ﬁnal dividend only).

ANDY PARSONS

Group Chief Financial Ocer

YOU CAN READ MORE ABOUT OUR TRANSITION TO NET ZERO ON OUR WEBSITE

Tonnes CO

Gas Electricity (market) Business travel Plan

1,400

1,200

1,000

800

600

400

200

2024

20252019 2020 2021

2022

2023

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

SUSTAINABILITY AND THE ENVIRONMENT

TAKING STEPS TO A

FAIRER FUTURE

Our sustainability strategy has three pillars: making a positive

impact, leaving a responsible footprint and creating a

fair world. You can discover more about our sustainability

story on our Group website justgroupplc.co.uk.

SCOPE 1, 2 AND BUSINESS TRAVEL

Net Zero

by 2025

(Scope 1, 2 and business travel)

SCOPE 3

50%

reduction

by 2030

(includes all Scope 3 emissions

categories as per GHG protocol)

SCOPE 3

Net Zero

by2050

(includes all Scope 3 emissions

categories as per GHG protocol)

OUR COMMITMENT TOWARDS NET ZERO

OUR SUSTAINABILITY FOCUS IN 2022

Our priority for 2022 was to complete the measurement of our baseline

and begin understanding our transition to net zero.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

Methodology We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition), and 2022 emission factors from the Department for Business, Energy & Industrial

Strategy. The boundary of our emissions reporting is Financial Control, comprising our directly owned and leased oces and building emissions and business travel under our control, including gas,

fugitive gas, electricity, car mileage, train travel and ﬂights. We use both a ﬁnancial emissions intensity metric (tonnes of CO

e per £m gross premiums written) and an employee intensity metric

(tonnes of CO

e per employee) to normalise our data and provide useful performance indicators. Eshcon Ltd conduct an annual review of Just Group plc’s data collation and calculation processes

and provides veriﬁcation of their GHG Emissions Statement. At present, carbon osets do not form part of our carbon mitigation strategy. We are in the process of setting near and long-term

targets aligned with science based target 1.5 degrees trajectory.

LEAVING A RESPONSIBLE FOOTPRINT

We have reduced the carbon footprint of our operations by 78% since 2019

(market based) and the remaining carbon is from business travel, small

electricity emission and gas from our oce in Reigate. During the year we

setcarbon budgets tomonitor travel and are looking at ways to reduce

theremaining carbon to net zero.

• We have joined Net Zero Asset Owners Alliance.

• Committed to Science Based Targets Initiative.

• And our recent London oce move was gold SKA rated.

91%

OF OUR PURCHASED ELECTRICITY

IS FROM RENEWABLE SOURCES

(REGO

CERTIFIED)

13%

REDUCTION IN MARKET BASED

BUILDINGS EMISSIONS IN 2022

561

NEW HABITS FORMED

BY EMPLOYEES TO

REDUCE THEIR FOOTPRINT

8,108

SELF-DECLARED ACTIONS

TAKENBY OUR COLLEAGUES

TOREDUCE THEIR IMPACT

ONCLIMATE CHANGE

1 The SKA rating is a Royal Institute of Chartered Surveyors (“RICS”) environmental

assessment method, benchmark and standard for non-domestic ﬁt outs.

2 Renewable Energy Guarantees of Origin (“REGO”).

MAKING A POSITIVE IMPACT

We understand we have a long way to go in investing more assets that

support a positive impact, like others we are on a journey to fulﬁl this goal.

• We became a member of Carbon Disclosure Project (“CDP”) to further

engage with our supply chain on their sustainability journey.

• We are partnering with our asset managers to deliver positive outcomes.

£575m

ELIGIBLE GREEN ANDSOCIAL

COMMITMENT MET

Green T2 and sustainability RT1

bond fully allocated during 2022

£750m

TARGET TO INVEST BY 2025

Invested in green and social assets

GHG EMISSIONS DATA

Emissions – tCO

2022 2021

Scope 1 (natural gas and fugitive gas)

111 113

Scope 2 (purchased electricity location based) 205 267

Scope 3 (business travel) 138 32

Total emissions (location based)

454 412

Market based Location based

Intensity ratios 2022 2021 2022 2021

tCO

e per gross tCO

written 0.08 0.07 0.13 0.15

tCO

per full time employee 0.22 0.17 0.38 0.40

1 Tonnes of carbon dioxide equivalent (“tCO

e”).

2 Fugitive emissions are based on refrigerant gas escape from on-site chiller systems.

3 Increase in business travel post COVID-19 reﬂected in overall locations based increase.

30%

OF SENIOR LEADERSHIP

ARE WOMEN, TARGET OF

33% BY DECEMBER 2023

CREATING A FAIR WORLD

Creating a fair world is directly

inﬂuenced by the way we carry out

our business and also the way we

treat each other, namely colleagues,

customers, suppliers, or members of

society at large.

Just has become:

• a signatory to the Asset Owner

Diversity Charter and joined the

charters working group.

• a member of Progress Together.

• a member of GAIN insurance,

Autism, Insurance, Investment

and Neurodiversity.

44%

OF OUR BOARD ARE WOMEN

18%

OF SENIOR LEADERSHIP

AREFROM A BLACK, ASIAN

ORMINORITY ETHNIC

BACKGROUND, TARGETALIGNED

WITH 2021 UK CENSUS DATA

£55k

DONATED TO CHARITY BY

THEBUSINESS AND OUR

COLLEAGUES IN 2022

858

NUMBER OF HOURS

OF VOLUNTEERING

RECORDED IN2022

SUSTAINALYTICS’ 2023

TOP-RATED ESG PERFORMER

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

INVESTING

THE JUST WAY

Just has a compelling purpose: we help people

achieve a better later life, and this purpose

shapes our approach to how we invest.

SUSTAINABLE INVESTMENT STRATEGY

INVESTMENT MODEL

Our overall investment approach is driven by our ability to cashﬂow match

our liabilities with a mix of investment grade liquid and illiquid ﬁxed income

assets through an enhanced “buy and maintain” strategy. Our long-term

retirement income promises, which provide peace of mind and certainty

toour customers, are backed by long-term income producing assets, the

majority of which are managed in-house. On the illiquid side, these are split

between the lifetime mortgages that we originate and manage ourselves

and other illiquid assets, which includes a diverse range of investments

suchas infrastructure debt, private placements, commercial real estate

mortgages, ground rents and income strips. We have built a panel of 15

specialist external asset managers, each carefully selected based on their

particular areas of expertise. The opportunities originated by the managers

are then assessed by our in-house investment team who select the most

suitable investments to pass through our internal screening process.

Currently, the other illiquid assets account for £3.3bn or 16% of our £20.3bn

investment portfolio (excluding derivatives and collateral), but this is

expected to increase over time, as the proportion backing the new business

ishigher than the in-force portfolio. In 2022, we originated over £1bn of

otherilliquid assets in addition to over £0.5bn of lifetime mortgage to support

new business pricing and optimise back book returns

RESPONSIBLE INVESTMENT FRAMEWORK

Just developed a Responsible Investment Framework (“RIF”) in 2019, deﬁning

how we integrate environmental, social and governance (“ESG”) factors into

the analysis and decision making processes. Since its implementation,

investment opportunities have been assessed to ensure they meet our

pre-deﬁned criteria.

The RIF covers a range of sustainability issues, including climate change.

Within the framework, we adopt a principles-based approach seeking to

achieve four overarching objectives. These are to analyse and identify risks

and opportunities arising from Responsible Investment (“RI”) factors; engage

in frequent dialogue with external managers and providers; actively identify

and monitor our portfolio for investments not aligning with our RIF and take

action; and transparently disclose RI characteristics of our portfolio to

stakeholders. We also have a scoring system called purple, red, amber,

yellow, green (“PRAYG”), which assesses ESG risks associated with individual

investments. This ensures ESG factors, which also impact other risks

suchascredit and market risks, are fully considered. We have set out our

commitment to stewardship activities and are actively involved in a number

of initiatives.

GREEN AND SOCIAL INVESTMENTS

The Sustainability Bond Framework (“Framework”), developed in 2020, was

enhanced in 2021 in line with the International Capital Markets Association

Green, Social and Sustainability Bond Guidelines. The Framework has received

a second party opinion from Sustainalytics, recognising our environmental

and social credentials. Furthermore, a Green/Sustainability Bond Forum has

been established to approve asset allocations for any bonds issued by Just

Group using this Framework.

In September 2021, Just Group became the ﬁrst UK and European insurer

toissue a Sustainability Restricted Tier 1 bond. The Group has made a

commitment to invest the gross issuance proceeds of £325m in eligible

greenand social assets. When combined with the 2020 Green Tier 2 bond

commitment, the Group has committed to allocating a minimum of £575m

towards these eligible assets before September 2024.

By the end of 2022, we had completed the full £575m green/social asset

investment commitment spread across 23 green and social assets including

wind and solar investments in UK, USA, Germany, Spain and Chile, in addition

to UK social housing projects and green buildings . More information on this

can be found at justgroupplc.co.uk/investors/esg.

OUR PROGRESS OVER THE LAST 12 MONTHS

Over the last 12 months, we joined a variety of initiatives aligned with our

corporate sustainability strategy focusing on climate change and diversity,

equity and inclusion (“DEI”). We have been working towards enhancing

ourapproach set out in the RIF, whilst continuing to originate new assets

within the investment portfolio in order to meet our new business needs.

Additionally, we have supplemented our existing ESG data provider, MSCI, with

S&P to further enhance our analysis of ESG considerations and climate change

across the investment portfolio. Beyond this, we have continued to grow our

panel of specialist asset managers by selecting three new managers in 2022.

Even though we have completed our bond commitments, we expect to

continue increasing the Group’s exposure to green and social investments

inline with our overarching frameworks to deliver positive outcomes.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

Inaddition, a signiﬁcant proportion of our investments are in lifetime

mortgages, which fulﬁl an important social purpose by helping people in later

life to release equity from their home to supplement their pension income.

Below is a summary of the external initiatives/organisations we are members

of that are supportive of our wider sustainability goals.

Initiative/Organisation Description

United Nations Principles

for Responsible Investing

(the “PRI”)

A signatory of the UN Principles of Responsible

Investment (“UNPRI”) since September 2018,

becoming the ﬁrst UK asset owner to do so.

Association of British

Insurers (“ABI”)

Just is a member of the ABI and we aim to align

our climate objectives with the ABI roadmap,

actively engaging in a number of working groups.

Asset Owners Diversity

Charter (“AODC”)

Just joined the AODC in 2022 as a signatory

andworking group member, supporting with

developing the forward-looking strategy and

direction of this initiative.

Partnership for Carbon

Accounting Financials

(“PCAF”)

Just has joined PCAF to aim to align with its

methodology for calculating proxy emissions

given the lack of available data in some sectors/

asset classes.

Net Zero Asset Owners

Alliance (“NZAOA”)

Just joined this United Nations convened

initiativeto maintain best practices and to

alignourdecarbonisation commitments.

Financial Institutions

Focus Group for the Net

Zero Data Public Utility

(“NZDPU”)

Just joined the NZDPU in 2022, a Glasgow ﬁnancial

alliance for net zero led initiative focusing on

challenges and opportunities for ﬁnancial

institutions in relation to climate-transition data.

UK Stewardship Code In line with our ambition to continuously improve

and deliver transparency, we are committing to

apply to become a UK Stewardship Code signatory

in 2024.

Science Based Targets

Initiative (“SBTi”)

In 2022, Just signed up to the SBTi and with our

formal transition to net zero plan now published,

we will be presenting our target to SBTi for

ocialvalidation. SBTi is a global movement of

companies committed to aligning their business

with the most ambitious target of the Paris

Agreement to limit the global average

temperature increase to 1.5ºC above pre-

industrial levels.

LOOKING TO THE FUTURE

In November 2022, following a consultation and feedback process involving

the PRA, industry ﬁrms, the ABI and HM Treasury, the government

announcedthat it would amend certain features of the regulatory regime

forinsurance ﬁrms, known as Solvency II. One of the HM Treasury’s stated

objectives of this review was to support insurance ﬁrms to provide long-term

capital to underpin UK economic growth and productivity. The reforms,

whenimplemented are substantial and could unlock tens of billions of

pounds ofinvestment from the sector into the UK economy, in particular

decarbonising the economy, aordable and social housing, infrastructure

improvements and investments to support the UK’s world class science

andresearch capabilities.

Our investment approach will evolve further to adapt to changing

requirements. We plan to utilise our internal and external data sources,

working closely with our third-party data providers, to enhance our analysis

and underlying frameworks. In the coming year, we will continue enhancing

our transition plan, aligning with relevant standards and guidance, review

and improve the RIF including focusing on the implementation of

stewardship activities aligned with our broader RI objectives.

Enhancing our approach to climate risk management is a key priority to

ensure we can eectively manage these risks based on current available data

and scientiﬁc evidence. Improvements and updates to our broader strategy

will be continued throughout the year, including focusing on our stewardship

activities, which is vital to our forward looking plan. We are eciently

concentrating our eorts on this ahead of our forthcoming ambition to

continuously improve and deliver transparency by committing to apply

totheUK Stewardship Code in 2024. As a team, we are continuing to grow,

expanding not only the headcount of the team but the capabilities within it;

the number of members in the Investment team has almost doubled since

the end of 2021.

You can read more about our approach to managing climate change-related

risks in the next section of this report.

Dedicated ESG assets

(IFRS valuation basis)

31 Dec 2022

£m

31 Dec 2021

£m

Renewable energy – wind 287 334

Renewable energy – solar 342 172

Local authority 135 221

Social housing – private 129 193

Green buildings 42 21

Eligible under Sustainability Bond Framework 935 941

Social housing – public 393 533

Emerging market social ﬁnance 120 105

Other social assets 84 –

Total dedicated ESG assets 1,532 1,579

Bond portfolio 13,887 15,277

As % of total bond portfolio 11.0% 10.3%

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

SUSTAINABILITY STRATEGY: TCFD DISCLOSURE FRAMEWORK

STRATEGY AND GOVERNANCE

The Taskforce on Climate-related Financial Disclosures (“TCFD”) was

established by the Financial Stability Board to develop recommendations

toenable a better understanding of climate-related risks and opportunities.

TheTCFD recommends that companies provide information about their

governance, strategy, risk management, metrics and targets in relation to

climate change. Disclosures consistent with TCFD recommendations about

the potential implications of climate change for Just are included in this

report with the following exceptions:

Strategy recommendation disclosure (b): a methodology to model the

potential ﬁnancial impacts of climate change on our illiquid credit portfolio

has not yet been established for the reasons stated in the section headed

“Illiquid investments.” We have carried out deeper analysis on the

investment portfolio, where information was available. To progress this

further, once a baseline has been established, we will undertake a larger

project in 2023.

Metrics and targets recommendation disclosure (b): We have made progress

towards better and more consistent data for the non-LTM and LTM portfolios,

based on reported data with a coverage of less than 100% to be expected.

For the remainder, we estimate from other available data.

Why climate change is important for Just

We are aware of the increasing need to protect our business from the eects

of climate change and to reduce the impact we have on the planet to

continue achieving our purpose. However, there are still many uncertainties

regarding how the impacts of climate change will develop, with future

government policy potentially playing a signiﬁcant role. The potential climate

change impacts on Just are interconnected with other sustainability issues.

We recognise this is a journey and we plan to continue to work towards

limiting the eects of climate change.

Strategic overview

We have built our sustainability strategy around the United Nations

Sustainable Development Goals (“UNSDGs”) and three guiding themes:

making a positive impact, leaving a responsible footprint and creating a

fairworld. The strategy is aligned to the UNSDGs where we believe we can

make the most dierence and play our part in leaving a positive legacy to

theworld.

Last year Just made a commitment to reach net zero in its near term target,

own emissions (scope 1 and 2) by 2025 and all other emissions (scope 3) by

2050 with a 50% reduction in the latter emissions by 2030. This commitment

aims to align with the road map published by the Association of British

Insurers (“ABI”) in summer 2021 on behalf of the insurance industry. We have

since committed to the Science Based Target Initiative and plan to submit our

targets by 2024.

Our key strategic outcomes for 2022 were to understand our emissions

baseline and take steps towards planning our transition to net zero.

Understanding our baseline enables robust reporting on our progress to

netzero. To do this we have improved the coverage of emissions across

scope3 emissions by using third party data for actual and proxy emissions,

wherenecessary.

MAKING A

POSITIVE

IMPACT

CREATING A

FAIR WORLD

LEAVING A

RESPONSIBLE

FOOTPRINT

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

OUR PILLARS OUR COMMITMENT HOW WILL WE ACHIEVE OUR AMBITION? FINANCIAL IMPACT 2023 FOCUS

LINK TO JUST’S

STRATEGIC PRIORITIES

LEAVING A

RESPONSIBLE

FOOTPRINT

Attain net zero in

ournear term own

operations target

by2025

Understand, measure and analyse

ourbaseline, then identify areas of

eciencies and initiatives to enact

£1m estimated in

future costs to upgrade

the energy eciency of

our oce property

Increased momentum

for initiatives to net

zero

Transform the

way wework

Attain net zero in our

scope 3 emissions

by2050

Decarbonise our LTM and non-LTM

portfolios

Illustrative impacts

identiﬁed in risk

management section

Further enhance

scenario analysis for

transition planning and

risk management

Continue to reduce business travel

and support our colleagues in ﬁnding

ways to reduce their own emissions

No ﬁnancial impact

identiﬁed to date

Further education on

business travel impacts

and sustainable travel

Engage with our supply chain and

partners to understand their plans for

net zero and encourage reductions

£40,000 estimated in

future costs to obtain

data across the supply

chain

Direct engagement

with supply chain

where possible

Get closer to our

customers and

partners

Protect our business Grow in a sustainable way so Just

remains strong for future colleagues

and customers

No ﬁnancial impact

identiﬁed to date.

Embed sustainability

into business planning

Grow sustainably

Invest responsibly Continue to integrate environmental,

social and governance (“ESG”) factors

into our investment decisions

No ﬁnancial impact

identiﬁed to date.

Continue enhancing

approach

MAKING A

POSITIVE

IMPACT

Increase our

greenﬁnancing

opportunities

Look for further opportunities to fund

green and social assets

No ﬁnancial impact

identiﬁed to date

Continue allocating in

line with existing

targets

Develop and oer

sustainableproducts

Innovate to support our customers

and new customers by delivering

sustainable products

£50,000 estimated in

future costs to improve

energy eciency data

across our portfolio

Further develop

propositions to support

our customers

Grow through

innovation

CREATING

A FAIR WORLD

Manage with good

governance

Continue to integrate ESG factors

throughout our business and ensure

itisgoverned to a high standard

£20,000 in 2023

estimated for Board

training

Maintain employees’

awareness of

sustainability issues

Transform the

way wework

Ensure data is well

managed and secure

Continue good standards of data

privacy and control

No ﬁnancial impact

identiﬁed to date

Maintain appropriate

internal controls

Improve diversity

andinclusion

Build a diverse workforce No ﬁnancial impact

identiﬁed to date

Monitor and review

progress against

targets

Be proud to work

at Just

Support the health

and wellbeing of

ourcolleagues

Maintain focus on the wellbeing of our

colleagues and encourage healthy

lifestyles and working practices

No ﬁnancial impact

identiﬁed to date

Retain a positive and

supportive culture

Support our

customers (poverty,

income and housing)

Continue to provide sound and helpful

advice and continue to provide

support to our charitable partners

No ﬁnancial impact

identiﬁed to date

Increase awareness of

initiatives to support

Get closer toour

customersand

partners

The Group’s strategic priorities are aligned to growth and careful planning is needed to achieve

thatgrowth without an undue impact on our transition to net zero. Climate change and wider

sustainability issues are important considerations when making strategic decisions.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

SUSTAINABILITY STRATEGY: TCFD DISCLOSURE FRAMEWORK continued

SUSTAINABILITY AND CLIMATE CHANGE GOVERNANCE

The Group Board is responsible for setting the Group’s Sustainability Strategy

and targets. The Group Chief Executive Ocer (“CEO”) is responsible for

delivery of the sustainability strategy and associated emissions targets,

delegating responsibilities, as appropriate, to management and various

governance bodies shown in the table below. The Group Chief Risk Ocer

(“GCRO”) has been appointed as the executive sponsor responsible for

sustainability and holds the designated Senior Management Function for

climate change.

The Group Board also has a Sustainability Sponsor responsible for ensuring

the Board is appropriately discussing sustainability matters including climate.

To improve the governance of sustainability matters the Board has agreed

that a section of the Group Executive Committee and the Group Board

meetings will be dedicated to sustainability on a quarterly basis. Our

governance structure is regularly reviewed to ensure it remains appropriate

for the business and ensures sustainability matters are given sucient time

and debate at the appropriate level.

The frequency and level of oversight is listed in the table below:

FOCUS AREAS FOCUS AREAS FREQUENCY CHAIR/OWNER

1. Group Board Sets sustainability strategy and targets. Annual review John Hastings-Bass

Receives updates on sustainability initiatives and activities. Quarterly

Approval of the annual and half-yearly reports which include sustainability reporting. Annual (and half-yearly

as appropriate)

2. Sustainability Lead

(Non-Executive Director)

Responsible for championing sustainability at Board level. Ongoing Mary Kerrigan

Meets regularly with executive management to discuss sustainability initiatives and

emerging developments.

Periodic

3. Group Chief Executive

Ocer

Executing the sustainability strategy approved by the Group Board and delegating

responsibilities, as appropriate.

Ongoing David Richardson

4. Executive Sponsor

forSustainability

Oversees and communicates sustainability initiatives to the business. Ongoing Alex Duncan

5. Group Executive

Committee

Oversees new sustainability initiatives including emissions reduction strategies. Periodic David Richardson

Monitors progress of ongoing sustainability initiatives. Quarterly

Oversees progress to reach diversity and inclusion targets. Monthly

Review of any proposed changes to diversity and inclusion targets. Annual

Tracks sustainability management information. Quarterly

6. Group Audit Committee Review the appropriateness and clarity of climate-related disclosures and compliance

with ﬁnancial reporting standards in the annual and half-yearly reports.

Annual (and half-yearly

as appropriate)

Paul Bishop

7. Group Nomination and

Governance Committee

Considers sustainability as part of the skills gap analysis and any impact on

succession planning for future Director appointments.

At least annually John Hastings-Bass

8. Group Risk and

Compliance Committee

(“GRCC”)

Receives an update on the status of various climate risk actions and any concerns

about the delivery of the actions.

As required Kalpana Shah

Oversees sustainability and climate-related risks in the Full Group ORSA and quarterly

ORSA updates.

Annual and quarterly

Considers sustainability and climate-related risks within the Risk Appetite Framework. At least annually

9. Group Executive Risk

Committee

Considers the reports for GRCC (under 8 above) prior to submission. As per 8 above Alex Duncan

10. Remuneration Committee Formulates and monitors performance-related criteria for Executive Directors and

Senior Management which include relevant sustainability targets.

Annual Ian Cormack

11. JRL & PLACL Investment

Committees

Approval of the responsible investment framework, which forms part of the

investment framework.

Annual Mary Kerrigan

Oversight and review of ongoing adherence of investment activities to meet the

Group’s net zero commitment.

Quarterly

Oversight and review of climate risks impacting the investment portfolio. Quarterly

12. JRML Board Oversight of approach to reduce the emissions associated with LTMs to support net

zero commitments.

Quarterly Michelle Cracknell

Oversight and review of climate risks impacting the residential property portfolio. Annual

13. Green and Sustainability

Bond Forum

Reviews the assets invested in green and sustainable bonds and the pipeline for

future investment opportunities, and approves allocations.

Quarterly Alex Duncan

14. Sustainability Steering

Committee

Oversight of the implementation of various sustainability initiatives across the Group

and recommends items to the GEC and other committees as appropriate.

Monthly Alex Duncan

15. Sustainability Working

Group

Monitors the status of various sustainability initiatives and reports into the

Sustainability Steering Committee.

Bi-weekly Sustainability

Strategy Manager

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

RISKS AND OPPORTUNITIES

Summary of key opportunities

The opportunities to Just are emerging as we develop our Sustainability Strategy and undertake further work to assess our business with a sustainability lens.

OUR PILLARS OPPORTUNITY LINK TO JUST’S STRATEGIC PRIORITIES

MAKING A

POSITIVE

IMPACT

Group: The increased opportunity to inﬂuence and support the transition to net

zeroby engaging with asset owners, managers, suppliers, policy makers and other

market initiatives. This would support a market wide transition which aligns with

broader Net Zero commitments.

Get closer to our customers

and partners

CREATING

A FAIR WORLD

Lifetime Mortgage: There is an opportunity to provide more support to our

customers with the need increased due to higher than usual energy costs. This will

lead to an improvement of the EPC rating of our property portfolio, if successful.

Get closer to our customers

and partners

Retail: New products are emerging in the market that focus on responsible

investment themes such as climate change. We are considering how best to

furtherenhance our approach.

Get closer to our customers

and partners

LEAVING A

RESPONSIBLE

FOOTPRINT

Investments: Emerging technology and innovation are seen as potential

investment opportunities. New products available via external asset managers,

which focus more speciﬁcally on climate and sustainability objectives, represent

anopportunity to provide diversiﬁcation across our investment portfolio.

Grow through innovation

Deﬁned Beneﬁt: Opportunity to support a diversiﬁed client base of scheme

trusteesin achieving their responsible investment and climate change goals.

Get closer to our customers

and partners

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

SUSTAINABILITY STRATEGY: TCFD DISCLOSURE FRAMEWORK continued

RISK IMPACT TYPE TIMESCALE MITIGATION 2022 CHANGE/UPDATE

More stringent energy

performance standards

– commercial and

residential property

Residential property

values may fall below the

level of the loan leading

to losses.

Transition 5-10 years Fund EPC ratings for new LTM customers to

improve the energy performance data we hold.

Potential government assistance for property

owners’ energy improvement costs.

Seek ways of helping lifetime mortgage

borrowers to improve energy performance

standards.

Consider energy performance ratings when

lending on LTMs.

Structure commercial loans to include key

performance indicators for energy eciency

and other climate-related factors.

Risk increased due to a lack

of clarity on government

policy to reduce emissions

for residential properties.

Increased impacts and

threats from ﬂooding

and coastal erosion

For residential and

commercial mortgages,

the borrower’s ability to

service and repay the

loan could be aected by

increased costs due to

physical risks.

Physical 10 years+ Potential government action to protect

populated areas.

Vary lending policy to avoid vulnerable

residential and commercial properties.

No change to risk identiﬁed

Green investments

become dicult to

source or produce

loweryields

Unable to meet

Responsible Investment

Framework aims while

meeting investment

return needs.

IFRS balance sheet loss.

Transition <5years Increase the range of sources of origination for

potential investments. Availability of green

investments expected to continue to increase

due to government focus.

No change to risk identiﬁed

Credit investments seen

as exposed to climate

risks lose market value

Income should continue

but with increased risk of

default if issuers cannot

reﬁnance at an

aordable price.

Transition <15 years Reduce and avoid such investments in line with

the Responsible Investment Framework.

No change to risk identiﬁed

Targets for reduced

Scope 1 and 2 emissions

are missed by Just

Reputational damage

from failing to meet

stated commitments.

Transition <5years Commit and align with initiatives required to

reduce emissions.

Monitor progress closely.

No change to risk identiﬁed

Targets for reduced

Scope 3 emissions are

missed by Just

Reputational damage

due to failure to maintain

commitments.

Transition 5-10 years Pursue Responsible Investment Framework and

align with relevant external initiatives/guidance.

Enhance LTM proposition strategy to support

customers with energy eciency improvements.

Engage with supply chain to reduce emissions.

Monitor progress closely.

No change to risk identiﬁed

SUMMARY OF KEY RISKS

Our climate risk assessment remains that our LTM and non-LTM portfolios are

the areas with the largest potential exposure to climate change-related

transition and physical risks. The nature of the key risks has not changed in

the reporting period but some areas have evolved as we move closer to our

net zero target in the absence of government policy change. The table below

shows key risks and whether there have been any changes in risk exposure.

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

FURTHER ANALYSIS OF KEY RISKS

NON-LTM PORTFOLIO RISKS:

Our credit investments are held as long-term investments. Although the

value of the investments may be aected over time by the market’s view

ofthe borrower’s credit standing, it is the borrower’s ability to repay the

debtthat aects us the most.

Transition risks: The companies to which we lend could face additional costs

due to the nature and rate of the transition or, as a result of substitutability,

assets could become stranded.

Physical risks: Depending on the location, assets we are invested in may face

higher costs from extreme weather events or sustained asset damage and

business interruption due to impacts from longer duration physical impacts

of climate change.

Material increased costs to the borrower, as a result of climate change, may

aect their ability to meet their debt repayment obligations, increasing the

risk of default.

LTM PORTFOLIO RISKS

Just Group is exposed to property risk on the LTMs held on our IFRS balance

sheet. These LTMs are secured against residential properties located across

the UK. If the sale proceeds from the property are insucient to repay the

accumulated loan balance on the death or entry into long-term care of the

customer, Just would suer a loss due to the no-negative equity guarantee.

INSURANCE RISK

The Group’s primary insurance risk exposure is to longevity risk, through

products such as our Guaranteed Income for Life product. In recent decades

life expectancy has improved due to medical advances and lifestyle changes,

which can be expected to continue. Most deaths in this country relate to

conditions such as heart disease and cancer, with air pollution contributing to

around 5% of all UK deaths. The overall impact of climate change on longevity

is likely to be secondary through lifestyle changes rather than direct.

Interacting factors, including government policy and individual lifestyle

choices, make it dicult to accurately predict how much climate change

could impact on longevity, but this can be expected to evolve gradually over

the years. The insurance risk exposures to climate change are highly

uncertain and have not yet been quantiﬁed in the Group’s risk scenarios,

therefore no explicit allowance is made. Developments in this area will be

carefully monitored.

RISK MANAGEMENT

NON-LTM PORTFOLIO

Our climate risk investment strategy is based on the following key tenets:

• understand the risks to our investments posed by climate change

• take advantage of opportunities aorded by the transition to a lower

carbon economy

• engage in and inﬂuence change in the market to the extent that this is

ecient and possible

• decarbonise our portfolio in line with our Group commitments (more

information on our decarbonisation strategy can be found in our

transition plan).

Our Responsible Investment Framework seeks to manage the risk exposure

arising from broader ESG risks, including climate change and is monitored

bythe Investment Committee. The Framework uses the following scoring

system (“PRAYG”):

• Purple – excluded: divestment and no new investment

• Red – restricted: no new investment

• Amber – watchlist: investment permitted but close monitoring required

• Yellow – neutral: investment permitted

• Green – positive impact: investment encouraged

All Just’s existing and prospective investments, where we have veto rights

inplace are scored in this way to ensure a consistent and robust approach

istaken to assessing their ESG risks, including climate-related factors.

Inthecase of funds, where we do not have a veto right, a red, amber,

orgreen status is applied at the fund level.

LIQUID INVESTMENTS

In addition to assessing ESG risks, we have measured the Climate Value at

Risk (“CVaR”) for our liquid corporate bond portfolio, where climate data is

readily available – around 72% coverage of the portfolio. This forms part of

our scenario analysis approach, where we have used projected pathways,

inline with the Network for Greening the Financial Services (“NGFS”)

scenarios outlined later in this section.

ILLIQUID INVESTMENTS (COMMERCIAL MORTGAGES, INFRASTRUCTURE LOANS,

OTHER PRIVATE DEBT)

Assessing the risks to our illiquid investments is challenging due to the lack

ofspeciﬁc data as the borrowers are not subject to disclosure requirements.

We work alongside our asset managers to understand the most material ESG

risks (including climate-related physical and transition risks) inherent within

these investments.

We expect some of our illiquid assets to exhibit less transitional risk than

ourliquid bond portfolio where these assets are linked to renewable

energyproduction and energy-ecient buildings. For real estate and other

infrastructure debt assets, given the illiquid nature of these investments,

thetransition to net zero is expected to be the dominant risk with potential

costs associated with mitigation and adaptation.

WHAT PROGRESS HAVE WE MADE TO IMPROVE OUR BROADER CLIMATE RISK

MANAGEMENT ACROSS THE NON-LTM PORTFOLIO?

Over the last 12 months, we have implemented a revised responsible

investment strategy to continue enhancing our approach, including

improving the management of climate-related risks. As such, we have:

• enhanced our engagement with our external asset managers to

understand their approach and commitments to achieving net zero

andour wider RI objectives;

– joined the Partnership for Carbon Accounting Financial (“PCAF”) –

tocontinue enhancing our approach to estimating our emissions,

where emissions data is unavailable;

– submitted a statement of intent to join the Net zero Asset Owner’s

Alliance – to continue aligning our decarbonisation strategy with a

recognised initiative; and

– joined the Financial Institutions Focus Group for the Net Zero Data

Public Utility – feeding into the climate data steering committee

runbyGlasgow Financial Alliance for Net Zero (“GFANZ”);

• strengthened the Group’s expertise and resources in responsible

investing; and

• identiﬁed a data provider to help us estimate portfolio emissions, aiming

to apply principles of the PCAF methodology where possible.

LTM PORTFOLIO

Our property underwriting assessments allow for existing ﬂood and coastal

erosion risk. We are undertaking climate change scenario analysis to improve

our understanding of how our lending policy and underwriting approach

need to evolve to manage any future exposure to climate change risk.

METRICS AND TARGETS

The metrics below are used for our liquid corporate bond portfolio:

CLIMATE VALUE-AT-RISK (“CVAR”)

A risk metric which is an estimation of scenario-speciﬁc

valuation impact for transition and physical impacts,

at both an issuer and portfolio level.

WARMING POTENTIAL

An impact metric which gives a portfolio’s alignment

with future climate goals based on projected business

activities of invested companies.

CARBON FOOTPRINT

An impact metric that gives the GHG emissions

at an issuer and portfolio level.

The CVaR and warming potential metrics are purely illustrative as they project

far into the future based on assumptions about our existing investment

portfolio. The longer the time period that data is projected into the future,

themore uncertainty in the results. The carbon footprint metric reﬂects the

emissions of our current portfolio. We expect each of these metrics to reduce

as the composition of our investment portfolio changes over the years

through the application of our Responsible Investment Framework.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

SUSTAINABILITY STRATEGY: TCFD DISCLOSURE FRAMEWORK continued

The metrics below are used for our LTM portfolio:

CARBON FOOTPRINT

The estimated carbon emissions of the lifetime mortgage

portfolios expressed as an average per US$ million of

lifetimemortgage balance emissions.

PROPERTY VALUE AT RISK

A risk metric which estimates the potential reduction

inresidential property values under dierent climate

scenariosarising from physical and transitional risks.

ENERGY PERFORMANCE

We monitor our portfolio distribution by EPC rating using

actualand estimated ratings to measure our exposure to

anyintroduction of minimum EPC standards.

The emissions calculation uses assumptions based on the EPC rating that

isheld for the property, implied by the property postcode, or modelled

(available for all of our portfolio).

SCENARIO ANALYSIS

Background

Scenario analysis has been used to deepen our understanding of the risks

theGroup faces over a long-term time horizon. Just’s climate scenarios

areanchored on two parts: property scenarios measured using the

Representative Concentration Pathway (“RCP”) and the wider Network for

Greening the Financial System (“NGFS”) climate scenarios. The latter was

applied across both the lifetime mortgages and the investment portfolio.

For 2022, Just’s base case scenario was amended to a Divergent Net Zero

(“DNZ”) scenario given current market conditions, where policy actions

appear to bechanging due to general geopolitical tensions and the wider

implications of the war between Ukraine and Russia. In the alternative

scenarios, the Nationally Determined Contributions scenario was amended to

the Current Policies scenario given it reﬂected the most extreme physical risk

scenario, where there is potential for more frequent extreme weather events.

We have taken a prudent approach by assessing the most extreme

transition/physical risk scenarios to understand the illustrative impacts

onthe Group.

A summary of how Just has interpreted each scenario is provided below:

NGFS SCENARIOS RISK PROFILE ASSUMPTIONS

Divergent Net

Zero (“DNZ”)

Highest transition risks

of all, more acute in

consumer than

industrial sectors.

Overall lowest physical

risk of the NGFS

scenarios.

Net zero reached by 2050 but with

higher costs due to divergence with

more stringent policies across all

sectors, primarily focusing in the

transportation and buildings sectors.

Availability of carbon dioxide removal

(“CDR”) technologies assumed to be

lower than for Net Zero 2050. Emissions

are in line with a climate goal, giving at

least a 50% chance of limiting global

warming by the end of the century.

Net Zero 2050

(“NZ2050”)

Relatively low physical

risk combined with

relatively high

transitionrisk.

UK, US, EU and Japan reach net zero for

all greenhouse gases by 2050. China

makes progress in meeting its carbon

net zero pledge by 2060. This requires

immediate rigorous policies to be

introduced. CDR needed to reach this

goal, to be in line with sustainable

levels of bioenergy production. This

willresult in net zero CO

emissions

by2050.

Current

Policies (“Hot

House World”)

Moderate to severe

physical risks, but

relatively low

transitionrisks.

Assumes only current implemented

policies are preserved leading to higher

physical risks. Emissions continue to

grow until 2080 leading to around

3degrees of warming and irreversible

changes such as rising sealevels.

ENHANCEMENTS:

As part of the scenario analysis, we have further enhanced our approach in

the following ways:

1. Quantitative analysis

– Sector speciﬁc analysis to identify possible risk exposures using

theclimate ﬁnancial risk forum (“CFRF”) scenario tool and the

NGFSscenario explorer, with review by representatives from

businessand risk areas.

2. Data overlay

– MSCI CVaR data for the selected NGFS scenarios was cross-referenced

with the outputs of the qualitative analysis.

Overall, for material risk exposures possible management actions and

opportunities were noted.

As part of this process we considered the following factors:

Transition

risk

Policy The extent of policy action and potential movements in

carbon pricing.

Technology The extent of investment into energy eciency/low carbon

technologies/CDR.

Movements in capital expenditure to develop ecient/low

carbon products/services.

Regulation Potential changes in regulation across sectors/regions.

Market Market demand for energy ecient/low carbon products

or services.

The impacts on productivity/availability from human and

natural capital.

Legal Potential exposure to legal action due to emerging

transition risks from policy/regulatory action.

Physical

risk

Acute

Potential economic damages from extreme weather events.

Chronic

Movements in GDP from physical risks with rising

temperatures over time.

Source: derived using the NGFS climate scenarios NGFS Scenarios Portal.

disorderly

orderly

too little too late

Hot house world

Transitional risk

High

Low

Divergent

net zero

(1.5 C)

Net Zero

2050

(NZ2050)

Current

Policies

Physical Risks

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

GROUP ILLUSTRATIVE IMPACTS OF TRANSITION AND PHYSICAL RISK SCENARIOS,

PRE-MANAGEMENT ACTIONS

The results of our quantitative analysis relating to the non-LTM portfolio

andthe LTM portfolio are shown in the table below. The metrics show the

illustrative impacts on our existing non-LTM portfolio if it were to remain

unchanged to 2070. The analysis assumes no changes in the investment

portfolio and does not consider the Group’s cash/cash equivalent holdings,

derivatives and reinsurance assets. As a result of our upcoming 2023 project

focussed on scenario analysis and further enhancing our internal capabilities,

for consistency we have retained the methodology and data from our

approach in 2021 with a view to enhancing these disclosures following on

from our 2023 project.

SUB-PORTFOLIO

DIVERGENT

NET ZERO 2050 NET ZERO 2050

CURRENT POLICIES

(HOT HOUSE WORLD)

Liquid Corporate Bonds -7.0% CVaR -6.0% CVaR -4.4% CVaR

LTMs 3.6% 3.6% 0.2%

Results as at

31 December 2021 illustrative expected loss on 70% of the liquid investments of

the non-LTM portfolio,

31 December 2021 – estimated property value at risk.

This modelling suggests that transition risk may be a more material risk to

our non-LTM portfolio than physical risk. A 1.5°C temperature rise produces

higher impacts because the rate of decarbonisation is the greatest under

thisscenario, leading to potential highest costs for the bond issuers. The

illustrative warming potential of the existing portfolio suggests the issuers’

emissions are aligned to warming the planet by 3.1°C by 2100 in a scenario

aimed at limiting global warming to 1.5°C.

Similarly, the modelling of the LTM portfolio shows that transition risk is likely

to be the most material risk. We estimate transition risk arising from the

introduction of minimum EPC standards (based on assumptions stated in

theClimate Biennial Exploratory Scenario (“CBES”)) could lead to a 3.4%

reduction in property values under the net zero scenarios. This reduction

inproperty value would only aect Just in instances where it leads to the

property sale price being lower than the loan balance. We have not made

explicit allowance for transition risk within our reported numbers. The

estimated potential impact of transition risk on property values is based

onthe UK government implementing a minimum EPC standard of C and

thishas not been conﬁrmed as a government policy yet.

Any impact would be incremental over a period of years as and when loans

become repayable following the customer’s death or entry into long-term

care. The impact may be mitigated by the extent to which government

softens the blow for homeowners through grants and subsidies.

Our physical risk modelling estimates that they lead to at most a 0.2%

reduction in property values by 2080. Of the physical risks to which we are

exposed, increased ﬂood risk due to climate change is expected to have the

most material impact. Analysis suggests that our exposure to properties

classed as having a high ﬂood risk could increase steadily from 0.3% now

to1.5% by 2080 of properties backing our lifetime mortgages. Under the

‘Current Policies’ scenario, this could mean an additional 200 properties

exposed to high ﬂood risk by 2080 out of a portfolio of 55,000 properties.

The projections suggest that a similar pattern of increasing risk of subsidence

over time due to climate change increasing the chances of lengthy periods

ofdrought. Under the most severe scenario considered, about 100 more

properties could be exposed to subsidence by 2080. Analysis indicates that

our exposure to properties where coastal erosion is likely would remain

insigniﬁcant over the period to 2080.

The carbon footprint of the non-LTM portfolio and the LTMs is shown below:

BUSINESS AREA YEAR COVERAGE CARBON FOOTPRINT

Investments

(tCO

e/$m nominal invested)

2019 99.8% Scope 1&2: 84

Scope 3: 407

2020 99.8% Scope 1&2: 95

Scope 3: 372

2021 99.8% Scope 1&2: 111

Scope 3: 377

Lifetime Mortgage

(tCO

e tonnes per annum)

2019 100%

23.2

2020

2021 95% 13.1

2022 100% 14.2

1 c.60% of the LTM portfolio emissions is estimated each year.

2 2020 data not collected for LTM portfolio.

A combination of reported and estimated data has been used to calculate

the carbon footprint of the portfolio using nominal values; this includes our

third party data provider applying the principles under version one of the

Partnership for Carbon Accounting Financials (“PCAF”). For asset classes where

no approach has yet been identiﬁed by PCAF, our third party data provider has

applied an appropriate approach that is similar to the PCAF framework. Where

data was not provided issuer data was overlaid for bonds that had already

matured in the portfolio and another unweighted sector average was applied

to remaining gaps to produce a full portfolio footprint. This covers c.30% of the

2019 data, c.25% of the 2020 data and c.27% of 2021 data. We acknowledge

there is double counting in producing the carbon footprint data and have

therefore split the data by scope of emissions. Data could be subject to

change due to improvements in data quality going forward.

The carbon footprint of the non-LTM portfolio has been derived using a

combination of reported and estimated emissions data and supplied by

ourthird party data provider. It does not include cash/cash equivalents,

derivatives and reinsurance assets. It also uses a series of further estimations

based on the data on the portfolio to close the gaps in the dataset, where our

third party data provider was unable to provide information. The LTM portfolio

carbon footprint is calculated using the estimated emissions data based onthe

EPC rating of the property on which the LTM is secured. For 34% of properties

we use the rating on the record and for 66% of properties, we use an estimated

rating. The contribution of an individual property to the carbon emissions of

the overall portfolio is based on the loan-to value ratio ofthe relevant LTM.

LIMITATIONS AND OUTCOMES

The scenario analysis shows that the Group’s primary exposure is to

transition risks based on both the DNZ scenario and NZ2050 scenario. The

DNZ scenario appears to have the most onerous ﬁnancial impact to Just.

Whilst some conclusions can be drawn from our analysis, we recognise that

there are limitations to our approach as it is to a degree reliant on qualitative

analysis. There are also gaps in the data available, which means the analysis

may not reﬂect potential costs or impact across the entire portfolio. We will

continue enhancing our approach in the coming years to improve our

analysis of climate-related scenarios.

NON-LTM PORTFOLIO

Within the investment portfolio, as noted earlier, climate-related risk

exposures appear to be the most prevalent across a subset of sectors.

In our analysis we identiﬁed several potential management actions to

address these risks:

• Engage further with our external asset managers to identify climate

mitigation and adaptation investment opportunities.

• Inﬂuence and engage to retroﬁt properties to upcoming regulatory

EPCstandards (such as by providing more capital).

• Invest more towards assets that are committed to or are aligned with

ournet zero ambitions.

• Restrict or reduce exposure to climate laggards within individual sectors.

LTM PORTFOLIO

The government’s stated aim is for as many homes as possible to be

upgraded to an EPC rating of C by 2035 and it will consult on how this

couldbeachieved. Other policy initiatives are expected with lenders being

expected to play their part in encouraging improved energy performance

among the properties on which they advance loans.

An estimated three-quarters of the residential properties underlying our

lifetime mortgage portfolio of our existing lifetime mortgages have an

energy rating below the government’s target of an EPC rating of C. The lower

the EPC rating, the more likely that the property’s value will be aected by

this transition risk. We have a process in place to collect the EPC rating for

allnew Just branded mortgages.

WHAT ARE OUR FUTURE PLANS FOR THE CLIMATE RISK MANAGEMENT OF

THE NON-LTM AND LTM PORTFOLIOS?

We plan to:

• identify another data provider to support with further analysis of

thephysical and transitional climate-related risks

• enhance our approach to climate assessments of existing and

newinvestments to supplement our PRAYG scoring

• align our transition plan with external initiatives in line with our

commitments (i.e. SBTi, NZAOA)

• enhance and further integrate an appropriate stewardship

strategyinsupport ofclimate change and our wider responsible

investment commitments

• embed climate change risk factors in our LTM lending decisions,

ifpossibleusing post code level risk ratings.

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

COLLEAGUES AND CULTURE

A PURPOSE-LED

CULTURE

2022 was a year in which our colleagues

once again rose to the challenge, providing

support and certainty to our customers

when they needed it most.

Increasingly we have galvanised

our people around our

commitment of being a strong

andsustainable purpose-led

business for our customers, our

colleagues, our planet and

generations to come.

Our Just culture is underpinned by

people who are passionate and are

committed to making a dierence

to the lives of those around them.

A key business priority is that all of our colleagues feel proud to work at Just.

The combination of our strong purpose and having highly engaged teams

working the Just way, is a competitive advantage which will help drive high

performance and our growth strategy.

…helped me to think about

meand the team – I now

haveabetter understanding

ofmyapproach with others.

"Just Engage" colleague comment

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

Not many companies do this

kind ofinduction to new joiners

so welldone to Just!

"Just CONNECT" colleague comment

THREE STRATEGIC PEOPLE PRIORITIES

During the year we have focused on three key strategic people priorities

toenable the delivery of the Group strategy:

01. ensuring we have the right people with the

right skills in the right place at the right time;

02. building well led, high performing and

healthy teams, supporting the delivery

ofagreat employee experience; and

03. driving a purpose-led culture of inclusion

andbelonging, with diverse and talented

colleagues from dierent backgrounds

andexperiences.

A TALENTED AND FLEXIBLE WORKFORCE

As a business our size and culture gives our people the opportunity to

make animpact to their careers whilst making a dierence to the lives

of those around them. Having a growth mindset and supporting the

development of colleagues is fundamental to achieving our growth

strategy at Just. This ranges from professional leadership development

through to “lunch and learns” on our products, customers and markets

and piloting a new programme on habits and behaviours that strengthen

and sustain our culture and underpin an excellentcustomer experience.

Other key support and development include:

• All colleagues having access to LinkedIn Learning with 88% of colleagues

engaging with the tool (higher than the level of engagement in other,

similar organisations) and they have viewed over 1,600 hours of content.

• Supporting the professional development of colleagues across the

business. For example, we sponsored and supported 53 actuarial students

with their Institute and Faculty of Actuaries exams. We have also utilised

our apprenticeship levy to support colleagues studying for a range of

qualiﬁcations across areas including data science, accountancy, project

management and AI.

• Colleagues completing mandatory computer based training aligned

toregulatory requirements. This is in areas such as money laundering,

ﬁnancial crime and data protection, as well as core training linked to

ourpurpose, brand and culture, including plain English modules and

unconscious bias training.

We recognise the important role that our people managers play in supporting

the delivery of a great employee experience and in particular wehave:

• Designed and rolled out a resource for people managers with

comprehensive materials and training to provide a one-stop-shop

tohelpthem to lead high performing and healthy teams.

• Reviewed and redesigned our induction and onboarding process,

launching a new bi-monthly session called Just Connect where new

joinersget the opportunity to meet our executive team and senior

leaders, hear about our customers, products, and services and meet

colleagues from across the business.

We have continued investment in leadership and management

development, including:

• All executive team and senior leadership team (“SLT”) members completed

a 12 month programme delivered across four osite sessions, focused on

strategy execution and how to build and sustain a culture ofsuccess.

• We refreshed our ﬂagship people management programme – Just Engage

– and rolled this programme out to over 30 people managers throughout

the year. The programme focuses on core skills around self-awareness,

emotional intelligence and how to lead high performing teams.

• So far, over 50 managers have completed a 13 month management

development apprenticeship programme, leading to a level 5 certiﬁcate

inmanagement and leadership through the Chartered Management

Institute (“CMI”). This year, we also launched a new leadership

development programme designed for our current and future leaders.

13colleagues are completing the programme which leads to a CMI level 7

award in strategic management and leadership practice, CMI chartered

fellow status and a professional qualiﬁcation from Imperial College

business school.

Some colleague comments about the management development

apprenticeship programme include:

“Mentoring is brilliant and so is the course content”

“It is totally hitting the mark of what I expected to get out of the programme

and so much more in terms of developing my skills as a leader – I am applying

so much to my role here at Just as I am learning”

“Great content. Everything ties together with themes and the way the

learning is presented is logical. I can easily see what is required of me

bywhen to ensure I remain on track”

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

COLLEAGUES AND CULTURE continued

HEALTHY INDIVIDUALS AND TEAMS

We care about the wellbeing of our people and we are committed to

ensuring that colleagues feel personally supported at Just. We continue

to recognise the role we play in supporting colleagues’ wellbeing

and we have an executive sponsor for wellbeing at Just. People have

dierent needs and we oer a range of activities and support around

mental, physical, social and ﬁnancial wellbeing. We held focus groups

with colleagues from across the organisation to obtain qualitative data

regarding their wellbeing and ensure that our wellbeing strategy and

actions remain relevant and are driven by what colleagues need.

In light of the challenging external environment, over the last year

we haveincreased our focus on ﬁnancial wellbeing and put in place

speciﬁc ﬁnancial support for over 65% of UK based colleagues with

a one-o cost of living payment. This focused our support on those

individuals who are likely to bemost negatively impacted ﬁnancially by

inﬂation over the past year so that we can help to ease the challenges

of the winter period. We have also made interest free loans and

salary advances available to those requiring additional support.

We have a comprehensive range of beneﬁts including a group personal

pension, group life assurance (both individual and partner), income

protection, critical illness cover, private medical insurance, health screening,

health cash plan, dental insurance, travel insurance, will writing, and access

to Headspace.

In addition this year we have:

• Introduced an on-demand pay platform to provide colleagues with a

payroll savings scheme as well as a utility switching service, budgeting

tools and educational content.

• Provided colleagues with access to the Group’s ﬁnancial wellness services,

Destination Retirement and Pension Buddy to help them plan for a

ﬁnancially secure future in later life. We also recognised Pension

Awareness Day 2022 with the launch of Just’s retirement guide to improve

the experience of colleagues reaching retirement, as well as promoting

‘planning for your future’ webinars by our pension provider. We promoted

their sustainable investing webinars and ESG Hub to increase awareness

of how pensions are invested and which funds are ethical and sustainable.

• Recognised the link between ﬁnancial and mental health with, Tea and

Talk, sessions arranged by our mental health ﬁrst aiders. These were good

opportunities to promote the beneﬁts available to all colleagues aligned

to Mental Health Awareness week.

• Just Talk sessions covering topics such as managing emotions and living

with loss. Just Talk supports our work on vulnerability and how we can

support our customers more eectively. It’s a unique blend of factual

andpractical advice on subjects that colleagues are interested to know

more about.

• Launched a new beneﬁt to support colleagues with caring responsibilities

to navigate the care market through partnering with My Care Consultant.

I like that fellow colleagues are open to

sharing stories about mental health and

any personal experiences. Just oers

support for people to help with their

mental wellbeing.

Colleague comment from Peakon annual

engagementsurvey

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

PURPOSE-LED CULTURE OF INCLUSION AND BELONGING

At the heart of our business is our purpose which is delivered through

diverse,talented colleagues from dierent backgrounds and experiences.

Notonly is having a diverse workforce the right thing to do, it helps us to

succeed, innovate and better serve our customers now and in the future.

Ourdiversity, equity and inclusion (“DE&I”) strategy continues to drive

forward on all aspects of diversity and inclusion, with a current focus on ﬁve

key areas – gender, ethnicity, disability and neurodiversity, social mobility

andsexual orientation.

Our progress against our DE&I strategy and targets is underpinned by a

range of initiatives which included:

• A series of open sessions called Just Perspectives hosted by our

executives. Attended by colleagues from across the business and

supported by our employee networks and DE&I champions, these

sessions covered a wide range of topics, including race, disability,

neurodiversity, LGBTQ+ and social mobility. These forums provided an

excellent way to engage colleagues across Just on our DE&I agenda

tobuild momentum to support progress.

• For the fourth year in a row we co-hosted a session as part of DiveIn,

thefestival for diversity and inclusion in the insurance industry.

Around450 people attended the session which was focused on the

topicof menopause.

• 40 colleagues have taken part in the actuarial mentoring programme,

either as a mentor or a mentee, with ten mentees/mentors every year

since 2019. This programme is primarily designed to support the

development and retention of women within the actuarial profession.

Afurther 60 colleagues have taken part in the 30% club cross company

mentoring programme over the last few years, connecting female

talentwith experienced mentors from outside of our company.

• We ran the second cohort of our executive sponsorship programme,

with11 female colleagues matched with an executive sponsor at Just to

provide mentorship, advice and support for their development. Feedback

from this programme was excellent.

“The programme has really helped me to extend my networks and be able

tospeak to senior people who I have never worked closely with before.”

Participant in the executive sponsorship programme

We completed a reciprocal mentoring programme with ﬁve colleagues

fromBlack, Asian and Minority Ethnic background mentoring with dierent

members of our executive team. This helped to raise the awareness and

understanding of our most senior leaders around race and ethnicity issues at

work as part of our commitment to the Race at Work Charter. Again, feedback

from both mentors and mentees was excellent.

“I found our conversations really quite profound and quite moving – it’s

mademe reﬂect a lot about connecting and thinking about their individual

circumstances rather than just thinking that’s a colleague. Very powerful.”

Participant in the reciprocal mentoring programme

• We participated in the 10,000 Black Interns programme, aimed at

creating opportunities for young Black talent with paid internships. One of

our interns posted on LinkedIn: “It has been a remarkable experience at

Just. I have learnt a lot and I value all the connections made.” We will be

continuing our participation in the summer of 2023 and have signed up to

the newly launched 10,000 Able Interns initiative, designed to give

individuals with a disability a ﬂying start to their careers.

• We are also now members of Progress Together, a membership body

focused on improving socioeconomic diversity and inclusion at senior

levels within ﬁnancial services. We took the important step this year of

collecting data from colleagues on their socioeconomic background to

inform our strategy and plan in this area.

• We are new members of GAIN, the Group for Autism, Insurance,

Investment and Neurodiversity, reﬂecting our commitment to

championing neurodiversity within our business and industry

morebroadly.

GENDER DIVERSITY

We have increased gender diversity at senior levels from 27% to 30% in 2022

and are on track to deliver against our "33 by 23" pledge as a signatory to the

Women in Finance Charter that 33% of our senior leaders will be female by

2023. The percentage of women on our Board is now 44%. Our gender pay

gap reduced between 2021 and 2022 from 34.4% to 31.0%. These ﬁgures

reﬂect an increasing proportion of women at senior levels in Just.

RACE DIVERSITY

As a signatory to the Race at Work Charter, Giles Oen, Group Chief Digital

Information Ocer, is our executive sponsor for Race. Under his sponsorship,

we have publicly committed to increasing the percentage of senior leaders

from a Black, Asian or Minority Ethnic background to 15% by 2024, in line with

the percentage in the broader UK population. We are already at almost 18%.

We have also voluntarily published our ethnicity pay gap report alongside our

gender pay gap report.

DISABILITY

As a Disabilities Conﬁdent employer we are committed to taking action to

improve how we recruit, retain and develop disabled people. We also oer

mentoring and sponsorship opportunities to colleagues with disabilities and

have produced guidance and support for people managers on supporting

colleagues with disabilities. In addition to our membership of GAIN and

commitment to take part in the 10,000 Able interns programme in 2023,

wehave also held a series of events for all colleagues this year focused on

dierent aspects of disabilities, including sessions on deafness, autism

andattention deﬁcit hyperactivity disorder ("ADHD").

CLEAR AND REGULAR COMMUNICATION

Underpinning our approach has been our continued recognition of the value

of clear and regular communication at all levels within our organisation. We

understand that this helps colleagues to join the dots between our purpose,

strategic priorities and their day to day roles. We have continued to hold

quarterly CEO-led town halls which are very successful and give colleagues

not only the opportunity to hear a business update but ask the leadership

team any questions they may have.

“The David Richardson Town Halls are brilliant, he comes across really well

alongside the other executive team.”

Colleague comment from Peakon annual engagement survey

Following on from the success of our Conversations with the Board sessions

which we introduced in 2019, we have continued to give Board members and

colleagues the opportunity to connect, ask questions, and learn from one

another. Topics have ranged from what colleagues value at Just and what

they would like to improve, through to the role of the Board in guiding our

organisation. We’ve also covered our approach to reward, speciﬁcally in

relation to how executive remuneration aligns with that of our colleagues

across the Group. You can read more about the approach of the Board

engaging with colleagues in the Section 172 statement.

GOOD LEVELS OF ENGAGEMENT

In September we introduced Peakon, a new tool to help us further understand

and support the engagement of colleagues. It has given us rich data on what

colleagues value about working at Just, and areas in which they think we

could make improvements. We received an 85% response rate to this ﬁrst

survey, which in itself highlights that colleagues want to share their views

asthey know we take action based on their feedback. We also received

over12,000 comments on a whole range of topics, again, reiterating that

colleagues value the two-way listening culture we have in place.

“Just is a great company to work for, from support and development

opportunities as an employee but also for what we stand for as a company

and what we achieve for our customers. Proud to work for Just!”

Colleague comment from the Peakon annual engagement survey

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

COLLEAGUES AND CULTURE continued

As a result of this ﬁrst survey, we were pleased that the results showed we

have good levels of engagement, particularly excelling in the communication

of our strategy to our people. Moving forward, key areas that we are focused

on include improving our Reigate and Belfast oce environments, and

youcan read more about our new London oce environment on page 33.

Inparticular we will continue to support colleagues with their wellbeing,

especially with the challenging external environment, and ensuring that

theyhave the right skills, development and support as we move through

aprogramme of organisational transformation.

“I know what our purpose and goals are as a team and how my work

contributes to achieving our objectives.”

Colleague comment from Peakon annual engagement survey.

FEELING CONNECTED

During 2022 we successfully embedded our hybrid working approach which

iscentred around the majority of colleagues spending a minimum of 40%

oftheir time working from an oce. Oce working remains an important

part of the way we work at Just and allows our colleagues to take advantage

of the beneﬁts of face to face collaboration, networking and socialising.

Weemphasise to colleagues the importance of working from the oce

with"purpose" and as a crucial way, we will maintain and further develop

ourculture and drive our growth agenda. We have therefore taken the

opportunity to put in place a variety of in-person opportunities – from

earlycareer networking events to our Just Us Summer party.

JUST LIKE NEW – THE JUST POP-UP

As part of our focus on sustainability and building a greener business, in June

we held our ﬁrst "Just Like New" Pop-up shop at our Reigate oce. Colleagues

were invited to donate their good quality, second hand clothing which was

then put on display for other colleagues to take home. In the process we

raised valuable funds for Re-engage, our charity partner between 2018 and

2022, who are focused on tackling loneliness and social isolation of older

people. The event was such a success that we held a Christmas Pop-up shop.

SUSTAINABILITY ESTIMATES FROM JUNE’S POP-UP SHOP

837

TOTAL ITEMS DONATED

(613 items of clothing and 224 accessories)

195

TOTAL ITEMS ‘SOLD’ ON THE DAY

(133 items of clothing and 62 accessories)

EMISSION SAVINGS (KG CO

E) (CLOTHING ITEMS ONLY)

47kg

TOTAL SAVINGS ON THE DAY

(equivalent to driving 117 miles

or charging 5,717 smartphones)

215kg

TOTAL SAVINGS BASED ON

ALL ITEMS DONATED

(equivalent to driving 534 miles

or charging 26,153 smartphones)

0 SAVINGS (LITRES) (CLOTHING ITEMS ONLY)

37,240

TOTAL SAVINGS ON THE DAY

(equivalent to your daily water usage

for 264 days or taking 745 showers)

171,640

TOTAL SAVINGS BASED

ON ALL ITEMS DONATED

(equivalent to your daily water usage

for 1,217 days or taking 3,433 showers)

FINANCIAL STATEMENTSGOVERNANCEsrtgc rpr

I believe in our purpose, this is a

factor in my choice of working here.

Colleague comment from Peakon annual

engagement survey

GIVING SOMETHING BACK

Giving something back is extremely important to our people. As part of our

key priority of creating a fair world, we are committed to supporting our

localcommunities. At the end of 2022, we asked all colleagues to share their

suggestions for a new charity partner and to then vote on a shortlist. A key

criteria was that the charity aligned to our purpose of helping people achieve

a better later life.

We were delighted to announce towards the end of the year our new

partnership with Hourglass. The Hourglass mission is simple: end the harm,

abuse and exploitation of older people in the UK to create safer ageing and

afairer society. Just as crucially, it is about empowering older people so

theycan, where suitable, live their lives independently and fully trusting

those around them. The charity also aligns with our focus on supporting

vulnerable customers, which you can read more about in the Non-ﬁnancial

information statement.

As well as our corporate charity, colleagues continued to raise funds for

charities close to their hearts, and Just provides support by half-matching a

proportion of the funds raised. We also encouraged colleagues to take part

ina range of volunteering activities, including cleaning, painting, weeding,

digging, planting and potting at residential homes.

You can read more about our approach to Sustainability and our activities

inthe Section 172 statement.

OUR JUST CULTURE

At the heart of our business is our Just culture which is our North Star.

Howwe do things is just as important as what we do. Our leadership team

regularly share stories of the Just Way and how colleagues can bring our

company behaviours to life on a daily basis. In addition to local recognition

schemes, in 2022 we took the opportunity to bring together a number of

colleagues from across the business who had been nominated as great

role-models of the Just Way and our behaviours of being dynamic, for the

customer, always adapting and collaborative. We know that our colleagues

feel motivated by our purpose of helping people achieve a later life and

thatthrough their work they can make a dierence to the lives of those

aroundthem.

750

THE AVERAGE ATTENDANCE

AT THE TOWN HALLS

WASAPPROXIMATELY

750COLLEAGUES

(2021: approximately 730)

86%

AT LEAST 86% (2021: 82%) OF

COLLEAGUES WHO RESPONDED

TOOUR INTERNAL PULSE

SURVEYS FELT THAT THE

TOWN HALLS WEREVALUABLE

90%

AT LEAST 90% (2021: 89%) OF

COLLEAGUES WHO RESPONDED

TOOUR INTERNAL PULSE SURVEYS

FELTINFORMED ABOUT WHAT

WASHAPPENING IN OUR

ORGANISATION

93%

93% OF COLLEAGUES WHO

RESPONDED TOOUR SURVEY

ANDJOINEDDECEMBER’S TAKE

ON BOARD SESSION SAID THAT

THEYFOUND ITVALUABLE

JUST GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2022

OUR STAKEHOLDERS HOW WE ENGAGE WHAT MATTERS TO THEM HOW WE ADDRESS THESE CHALLENGES

INDIVIDUALS/FINANCIAL ADVISERS

People approaching, at or in-retirement wanting

help with their retirement ﬁnances, and their

ﬁnancial advisers.

• Engage directly when we provide regulated ﬁnancial advice,

guidance and other forms of help and customer service.

• Engage indirectly via ﬁnancial intermediaries and other

organisations such as pension schemes and corporates.

• Engage with research companies who collect the thoughts

andopinions of individuals. This helps the Board to understand

how Just is delivering its services and meeting the needs of our

target customers.

• Security and peace of mind that

Justwilldeliverits promises.

• Advice they can trust.

• Good value for money.

• Product dierentiation.

• Quality of service delivered.

• Reputation of the Company.

• Behave prudently and have strong, eective governance to ensure we always meet the promises we make to

our policyholders, and that due care and attention is given to customer outcomes.

• Continued to invest in our colleagues and infrastructure to ensure we maintain our reputation for service design

and delivery, evidenced by our awards for outstanding service.

• Dierentiate our products oering unique features to customers such as our medically underwritten Just For

You Lifetime Mortgage (“LTM”) which oers personalised terms for customers.

• Further investment in our Just For You LTM automation initiative to enhance the LTM digital adviser services.

• Oer Destination Retirement, a ﬁnancial planning service that provides tailor-made advice to individuals

approaching or transitioning into retirement after work.

PENSION SCHEME TRUSTEES/EMPLOYEE

BENEFIT CONSULTANTS

Individuals accountable for securing good

outcomes for pension scheme members

andclients.

• Convene industry events to bring together trustees, advisers

andsubject matter experts to encourage dialogue and

shareknowledge.

• Hold individual meetings to understand the speciﬁc challenges

facing pension scheme trustees.

• Commission surveys and other research to listen to feedback

fromtrustees and advisers.

• An insured solution that oers certainty

fortrustees and security for members.

• Financial strength and strong counterparty

credentials that deliver security for advisers,

trustees and their members.

• Reputation of the Company and service quality.

• Access to the deﬁned beneﬁt de-risking market

for smaller transactions.

• Policyholder experience and service quality as

many schemes are targeting future buy-out

transactions.

• A secure asset portfolio with ESG and

sustainability at its heart.

• Ongoing development of strong asset sourcing capability that delivers pricing advantage.

• Selectively participate in bulk annuity tenders and deploy our innovative deﬁned beneﬁt partnering solution to

preserve capital and help maintain our secure counterparty credentials.

• Regular attendance at client trustee Board meetings to update them on their Just Buy-in assets.

• Hosted a wide range of events to share knowledge.

• Oer a bulk quotation service to provide early visibility of insurer pricing.

COLLEAGUES

The team of colleagues at Just who deliver

outstanding service to customers and to

thepeople who support those that deliver

theservices.

• Directly, day to day through line management and using a variety

of communication channels.

• Gather feedback using a range of techniques such as structured

surveys and through more informal channels.

• The Group having a clear vision and purpose.

• Having the opportunity to grow and develop.

• Diversity and inclusion initiatives.

• Wellbeing.

• Hybrid working.

• Strong community and environmental

credentials.

• CEO quarterly brieﬁng sessions for all colleagues across the Group to reiterate Just’s purpose and provide a

business update on key initiatives to deliver our strategic priorities and help people achieve a better later life.

• Non-Executive Director engagement with colleagues to bring their voice into the boardroom.

• Developing colleagues through in-role experience, coaching, mentoring, online learning and training.

• Continued to make strong progress with respect to our commitment to build a diverse workforce and an

inclusive culture at Just.

• Oered support and guidance for our colleagues built around mental, physical, social and ﬁnancial wellbeing.

• Embedded a hybrid way of working to encourage collaboration and innovation, and to sustain Just’s culture.

• Provided volunteering opportunities to make a positive impact in our local communities.

• Communicated sustainability initiatives through Pawprint, an app to support colleagues to reduce their own

carbon footprint.

INVESTORS

The equity and debt investors who invest

thecapital to ﬁnance the business.

• Direct meetings with members of the Board.

• Shareholder communications.

• Annual General Meetings and results presentations.

• Returns on investment.

• Assured regular interest payments and capital

protection.

• Deliver a sustainable capital model.

• Operate in a socially responsible and sustainable

manner including greater diversity in the

organisation.

• Held meetings with shareholders in 2022 to engage on Just’s performance and strategic developments, and to

discuss any issues or concerns.

• Seminars were held for investors and potential investors on Just’s Deﬁned Beneﬁt de-risking strategy and the

Group’s investment strategy with webcasts published on our website.

• Further reﬁned our strategy with clear, speciﬁc goals driven by appropriate priorities including a target to

achieve greater than 10% return on equity.

• Payment of dividends to shareholders.

• Continued focus and steps taken during the year to refresh the Board.

REGULATORS

Organisations who regulate the conduct

ofﬁrmsand their ﬁnancial stability.

• Direct meetings with members of the Board and the

leadershipteam.

• Written responses to consultation documents.

• Participation in workshops directly with regulators and

viatradeassociations.

• Boards and senior management understand

theregulatory objectives, and seek to ensure

good consumer outcomes are achieved and

policyholder commitments are met.

• A culture that supports adherence to the spirit

and the letter of regulatory rules and principles.

• Foster open and transparent communications

with our regulators.

• Positive engagement to encourage eective

competition and consumer protection which

results in better customer outcomes.

• Continued to respond to regulators in a timely and constructive manner and engage directly on any key

regulatory matters.

• Implemented material management actions to further reduce residential property exposure.

• Active participation in policy development directly with regulators and via trade bodies.

• Timely preparation and ﬁling of regulatory returns.

SUPPLIERS

The companies providing the services, materials

and resources to enable Just to operate the

businesses in the Group.

• Ongoing direct communication through a variety of channels

toinform on workloads, challenges and potential innovations.

• Regular performance reviews enable all parties to understand

expectations and support each other to optimise delivery.

• Written feedback following each tender process to explain

theoutcomes.

• Collaborative relationships with open,

honestandtransparent communications.

• Fair, transparent and objective process

andevaluation criteria when bidding for

newbusiness.

• Fair payment terms which are consistently

metwithin deadlines.

• Our procurement and outsourcing policy ensures that tender processes are fair and transparent, and all

suppliers receive feedback on submissions. All suppliers are expected to adhere to relevant legislation and

regulatory regimes, and to act ethically and with integrity. Risk-based proﬁling ensures all suppliers receive the

relevant level of interaction with Just.

• Clearly deﬁned performance metrics are agreed with the supplier at the outset to measure ongoing success.

• Conﬂicts of interest checks at on-boarding, ensuring advantages are not gained through personal relationships.

COMMUNITY AND THE ENVIRONMENT

Our peers, civic society and the later life ﬁnancial

advice communities who we engage with and

the wider environment.

• Partnership with charities supporting local communities and

theenvironment.

• Engage with the ﬁnancial advice community.

• Participate in sustainability initiatives.

• Oer support and information to help

individualstransition from work to retirement.

• Providing support for vulnerable customers.

• Support fundraising eorts in local communities.

• Leave a responsible footprint.

• Oer helpful tips and guidance on topics relating to retirement on our customer website.

• Initiatives to raise awareness in the ﬁnancial advice community to support the needs of vulnerable customers.

• Partnered with Hourglass, a national charity whose mission is to end the harm, abuse and exploitation of older

people in the UK.

• Continued to make progress to reach our carbon net zero targets.

• Partnered with EcoTree, a sustainable forestry management company, to plant trees, as one of our

sustainability initiatives.

RELATIONSHIPS WITH STAKEHOLDERS