Just Group profits lifted by jump in pension buyout deals

Just Group shares jumped after the specialist insurer boasted it had ‘never been stronger’ as a surge in pension buyout deals helped lift profits.

The Surrey-based company completed the de-risking of 56 defined benefit pension schemes worth £2.6billion in 2022, almost double the 29 it completed in 2021 worth £1.9billion. 

Analysts expect the pension buy-in and buyout markets to boom in the coming years as more companies turn to insurers like Just Group to shift pension liabilities and run their pension schemes. 

Pension buyout boom: Analysts forecast £200bn worth of buyout transactions over the next three years

Analysts forecast £200billion worth of buyout transactions over the next three years – similar to the total amount for the last decade, according to the group. 

The insurer said its near-term pipeline is over £6billion and it is expecting ‘a busy year with a greater number of medium and large transaction opportunities coming to market’.

‘We have never been stronger,’ it told investors today as it posted a 19 per cent rise in underlying operating profit to £249million for 2022.

‘The steep rise in interest rates during 2022 has had a positive impact as it further reduces DB [defined benefit] scheme funding deficits, thereby making de-risking transactions more affordable,’ the group explained.

‘Many schemes are already or approaching fully funded sooner than they had expected, and hence able to accelerate their de-risking plans.’

Just Group completed its largest transaction to date worth £513million in February.

And the group added it had already ‘signed or are exclusive on a number of other medium sized deals’. 

The company declared a final dividend of 1.23 pence per share, up from 1p, bringing the total dividend to 1.73p per share.

Just Group shares rose 10.5 per cent to 90.70p in afternoon trading on Tuesday. They have risen 20 per cent over the last year.