Research

Insurance – Solvency II One Year On

One step forward, two steps back

April 27, 2017
| Austria, Belgium, Bulgaria +24 more
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • Germany
  • Greece
  • Hungary
  • Iceland
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Slovenia
  • Spain
  • Sweden
  • United Kingdom

This report, published in conjunction with the independent research provider Autonomous, reviews the European insurance industry’s year-end 2016 disclosures. We find that:

  • Insurance sector performance reporting has become more complicated as a result of Solvency II, and IFRS 17 proposals are unlikely to help.
  • Solvency II has led to a reduction in life supplementary embedded value (in particular free surplus movement) disclosures with no replacement.
  • Solvency II prescribed disclosures (to be published for the first time this May) will not address investor gaps, as there is no requirement to produce a movement analysis from one balance sheet date to the next, nor sensitivities.
  • In order to aid the investor community, we propose standardised templates for the insurance industry disclosing, inter alia, a movement in Solvency II free surplus, Solvency II sensitivities, and an explanation of whether Solvency II or IFRS or something else is the dividend paying biting constraint.

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