By Yadarisa Shabong
(Reuters) -Just Group’s first-half profit beat estimates on Tuesday, and the British insurer now expects full-year earnings to surpass its previous expectations on demand for pension insurance, sending shares up as much as 18% in early trading.
The stock hit its highest since June 2018 on Tuesday at 139 pence after the London-listed company said it expects to “substantially” exceed its 2024 operating profit forecast in March – of over 420 million pounds – twice its profit in 2021.
In morning trading, shares were up about 13%.
Just Group, which specialises in annuities – also known as pensions that pay a fixed income for life – has benefited from soaring demand for insurance for corporate pension schemes, known as bulk annuities.
CEO David Richardson said the market for pension risk transfers remained strong and Just Group had taken advantage of growth in smaller transactions. The individual annuity market is also growing, he said.
“We’re already in conversations with employee benefit consultants about some of the bigger deals they might be wanting to bring on in 2025,” Richardson told Reuters.
British regulator Prudential Regulation Authority is scrutinizing UK insurers’ use of funded reinsurance to underpin bulk annuity deals on concerns it may not be consistent with prudent risk management.
Finance chief Mark Godson said he did not believe the regulator’s potential restrictions would fundamentally change how the company would use funded reinsurance.
Funded reinsurance was “not something we need to deliver our core business plans, but it is a useful tool,” he said.
Just Group reported underlying operating profit surged 44% to 249 million pounds ($318.55 million) in the six months through June 30. Analysts had forecast 208 million pounds on average in a company-compiled consensus.
($1 = 0.7817 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and Bernadette Baum)
