Analysis of Solvency Reports for 2023
Analysis of Solvency Reports for 2023
23 July 2024
The majority of Solvency and Financial Condition Reports (“SFCRs”) for 2023 have now been published and, as in previous years, AFM Associate Member Broadstone has produced a helpful and clear summary and analysis of various metrics using the publicly available data for AFM members and other firms of a similar nature and size.
In total, 29 insurers are included in the analysis, the majority of whom are AFM members. Key points in the analysis include the following.
- The 29 firms have combined assets of £29bn, a figure that has risen by 2% over the year, with most broad asset classes seeing positive returns.
- Risk margins reduced by £100m through 2023 owing to the Solvency UK reforms effective at the 2023 year-end. Consequently, the vast majority of insurers (primarily in the life sector) report increases in own funds.
- Across the group of 29, the SCR increased by 7% (with marginally higher increases in the non-life sector).
- With higher increases in own funds relative to the SCR, solvency ratios increased for life insurers. Solvency ratios remain high across all sectors – typically 2-3 times the level required by regulations.
- On average, all types of insurers saw increases in net claims incurred. This outstripped any increases in net written premiums, which combined with increasing expense ratios, suggests some downwards pressure on operating profits.
Commenting on the publication of the report, David Gray, Senior Consultant Actuary at Broadstone, said: “We are pleased to publish our third report on solvency disclosures in the mutual sector.
“Mutuals play a vital role in our financial services ecosystem, providing customer-centric access to a greater range of insurance products often at more affordable rates.”
To read the full report click here