One year of practice has not prevented some underwriters making mistakes in their second annual public Solvency II filings, though errors seem less prevalent than last year.
Legal & General published a solvency and financial condition report (SFCR) with errors in the pivotal measures of minimum and solvency capital requirement (SCR) for its L&G Assurance Society operation, for instance.
Smaller rival Sanlam Life & Pensions UK Ltd published figures that had been poorly scanned in and were, in parts, extremely difficult to read.
When contacted by Insurance Risk Data, InsuranceERM's data service, a spokesperson for Legal & General ascribed its mistake to a "formatting error when presenting in thousands of pounds sterling in the SFCR". The group plans to issue a revised document.
Another underwriter, KBC, corrected erroneous formatting in its 2016 filings, when the Belgian group alternated between providing absolute figures and statistics truncated in thousands of euros in its group-level QRTs.
In one QRT it had also published a figure of 4.8E -13, for gross proportional reinsurance on medical expense cover.
Insurers discussing SFCRs at InsuranceERM's Risk & Innovation in Data & Analytics conference last week said the process of compiling SFCRs and quantitative reporting templates (QRTs) was still onerous the second time around "and the deadlines to submit these documents are tight and getting tighter," commented the chief risk officer at one reinsurer.
Mistakes last year include one insurer publishing their SFCR containing Latin placeholder text, and anothers making significant errors in investment income figures.
Several insurers revised their 2016 year-end reports during 2017, which generally led to a lowering of key solvency ratios compared with their first publications. Twelve months on, not all have recovered the lost ground.
Harcourt Life International Designated Activity Company (Dac) has more than made up for its SCR ratio being revised from 143% to 130% last November. Harcourt noted it had acquired a portfolio of offshore bond business from Axa Life Europe, and it removed the impact of a transitional measure on technical provisions (TMTP) recalibration. But a year later the SCR ratio for the entity (renamed Harcourt Life Corporation Dac) was 192.6%.
But the ratio for Methodist Insurance plc, which fell on restatement during 2017, from 341% to 264%, had not yet entirely retraced the decline by the following year (289.5%). The revision to its number came in August 2017 after the underwriter found it had understated its 2016 SCR, with an error in how the transitional calculation for equity risk had been applied.
- All SFCRs and QRTs are available from InsuranceERM as part of our 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]
