Insurance groups get in early with public Solvency II documents

08 May 2018

Insurers across Europe have thrown reticence to the wind and beaten reporting deadlines under Solvency II, with many filing documents six weeks early.

While subsidiaries whose financial year ended on 31 December had to file theirs by 7 May, group-level reports are not due until 18 June – but this did not stop groups in at least five countries submitting reports already.

Munich Re, Standard Life, Legal & General, Arag, Achmea and Cattolica were among at least 12 that already promulgated solvency and financial condition reports (SFCRs) and quantitative reporting templates (QRTs).

Smaller rivals following suit included Bupa, Direct Line, Esure and Wesleyan.

Dutch groups NN and ASR have already published theirs.

Munich Re’s 2017 document was 15 pages longer than in 2016, thanks to a slightly longer description of its governance system. It folded its board compensation description into the flow of its report.

Standard Life Aberdeen (SLA) expanded the length of its report, too, from 150 pages as Standard Life Group in 2016, to 174 pages.

SLA revealed that its solvency capital ratio at the end of 2017 would have been 151%, not 185%, without the matching adjustment; a healthier 184% minus the volatility adjustment; and 161% without the transitional measure on technical provisions (TMTP).

The group fitted the significant recent events – merging Aberdeen and Standard Life in 2017, then selling Standard Life Assurance Limited to Phoenix Group Holdings this year – into fewer than 100 words.

SLA offset all but £200m ($270m) of the £500m increase in solvency capital requirement following the merger, and grew own funds mainly by proceeds from floating HDFC Life.

The group also revealed it was in talks with the Prudential Regulation Authority (PRA) and Financial Conduct Authority about “the capital regime which will apply at group level following the sale” of the insurance operations to Phoenix. 

Legal & General revealed its capital coverage would have fallen from 181% to just 50% without the benefit of the matching adjustment, and to 109% without TMTP.

“Losing matching adjustment approval is a remote risk for the business [and] we have a regular dialogue with the PRA about our matching adjustment strategy,” Legal & General wrote.

Dutch underwriter ASR, meanwhile, dedicated a section of its SFCR to climate change risk, saying it “believes it is important that customers and advisors become more aware of the consequences of climate change [and] contribute to mitigate its effects”. 

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