Re/insurers will have to submit year-on-year comparisons in next year's submission of solvency and financial condition reports (SFCRs), Europe's insurance authority has said.
The requirement is among the remarks made by the European Insurance and Occupational Pensions Authority (Eiopa), which published its first analysis of a sample of SFCRs yesterday (18 December).
Eiopa expects the comparative information to cover at least the following areas:
- qualitative and quantitative information on underwriting performance, at an aggregate level and by material line of business and material geographical areas where it carries out business over the reporting period;
- qualitative and quantitative information regarding the performance of the investments over the reporting period;
- other material income and expenses incurred over the reporting period;
- any material changes in the relevant assumptions made in the calculation of technical provisions; and
- separately for each tier of own funds, information on the structure, amount and quality at the end of the reporting period.
When providing comparative information, the format of tables should be used as much as possible in the narrative part of the SFCR, Eiopa said. These tables could include amounts for both reporting years or focus on the material differences between both reporting years. Qualitative information on material differences between two reporting years are also expected to be included in the report.
Publication of quantitative reporting templates (QRTs) for current and the previous reporting year as an annex alone is "not sufficient" to be considered compliant.
However, Eiopa also praised firms for publishing their 2016 reports on time and in general complied with Solvency II requirements.
Among the areas for improvement are:
- A more "fit for purpose" summary;
- undertaking/group specific information about the own-risk and solvency assessment;
- better structured and more comprehensive information on risk-sensitivity to different scenarios or stresses;
- more relevant information on bases, methods and main assumptions used for the valuation of assets, liabilities and technical provisions and addressing the uncertainties around valuation; and
- more comprehensive information on eligible own funds.
Eiopa's statement can be viewed here.
- All SFCR reports and associated quantitative reporting templates (QRTs) are available from InsuranceERM as part of a new insurance risk data service. This service combines European insurers' financial and regulatory filings, including the new Solvency II disclosures, into a single, comprehensive and user-friendly database ideal for market/peer analysis, research and benchmarking. To find out more please email [email protected]