Just Group profits on pensions buyout boom as rising interest rates drive record deals
Just Group today said the boom in pensions buyout deals had helped boost its underlying profits by 19 per cent.
The Surrey firm completed 56 pensions de-risking deals, worth £2.6bn, successfully profiting on the pension’s buyout boom.
Higher interest rates over the previous year have improved pension scheme funding levels, in a shift that has let them pass liability over to specialist insurers through bulk annuity deals.
This has in turn driven a boom in pensions buy-out deals that analysts have said could see £200bn worth of bulk purchase annuity (BPA) deals over the next three years.
Earlier this month Just Group completed its most valuable pensions buyout deal after finalising a £513m buy-in to the GKN Group pensions scheme.
Rising interest rates also boosted Just Group’s own profits, as the firm generated stronger returns from its investments.
Company chief executive David Richardson said the “very strong results” mark a “record start to the year” as he argued “near and long-term structural growth drivers” mean the firm has “significant long term opportunity” in the pensions buyout market.
Just Group added that it is “pleased” with the government’s current plans to overhaul the Solvency II regulations that govern Britain’s insurance sector.
It noted the reforms could unlock “billions” to be invested in projects that further the UK government’s various agendas, including levelling up, decarbonization, and science and technology.
First set up in 2004, Just Group set up its pensions de-risking in 2012, before launching an IPO the following year in 2013.