The time for clarity and transparency in the insurance industry has arrived with new compulsory EU rules coming into force this week that demand insurers open up about their dividend capacities and cashflow. So how are the giants of the UK industry doing?
For Legal & General and
Aviva, it seems the safety buffers are firmly in place – but both are also chasing some of their peers.
According to an Evening Standard report, L&G was boosted by the sale of Cofunds as its Solvency II capital ratio rose from 171% in December to 180%. This works out to a surplus of around £7 billion. Meanwhile, Aviva also has a sizeable capital cushion in place – 172%, representing a £12 billion surplus.
However, both have a way to go before catching some of their prestigious European rivals.
AXA, for example, has a 196% capital buffer;
Allianz is at 212%; while some European reinsurers are scoring even higher,
Munich Re being the most notable at 267%.
The Solvency II reporting requirements are designed to protect policyholders against the possibility of a banking style mega crash.
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