Date: 25th June 2021

In the study about the Solvency and Financial Condition Reports (SFCRs) - that have to be disclosed under the Solvency II Directive (Art. 51) – we take a closer look at eight different figures that are calculated and rated:

  1. Transparency, expressed on a point scale (from -2 to 19);
  2. Solvency ratio, expressed as a percentage of existing capital out of insurance
  3. Expected profits, as a percentage of profit (calculated in future premiums) out of
    the total own funds;
  4. Market risk, as a percentage out of total risk;
  5. Government bonds, as a percentage of out of total assets;
  6. Diversification; showing how well diversified the portfolio is;
  7. Surplus funds; showing the additional profits not yet disbursed to policyholders;
  8. Risk margin, as a percentage of provisions covered in addition by a third party.

These figures (or metrics) are explained in the sections below. Each figure or metric is then assigned a colour reflecting “traffic lights”:

  • “Green” figures indicate a situation that is quite good from the perspective of a policy holder;
  • “Yellow” figures express a potential of optimization while the situation is nevertheless still acceptable; and
  • “Red” is a sign for a problem that should be solved; or
  • “Light Grey” is used to indicate an unreasonable high solvency ratio.