Menu

Search

Menu

Search

Moody's: Solvency II regulatory disclosures unlikely to affect European insurers' credit quality

Creditworthiness of European rated insurers is unlikely to be affected when they will have to reveal, for the first time starting in May 2017, the extent to which their Solvency II ratios are enhanced by various measures, including transitionals and long-term guarantee measures, says Moody's Investors Service in a report published today. The disclosures are part of insurers' compliance reporting under the new capital regime.

Moody's report, "Insurers -- Europe: New Solvency II disclosure to provide insight, but unlikely to change our credit view," is available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release. The rating agency's report is an update to the markets and does not constitute a rating action.

"Our credit view of insurers is unlikely to change following the new disclosures as we already consider the impact of transitional measures on their Solvency II ratios. We expect the majority of our rated groups to maintain reported regulatory ratios well above 100% and remain well removed from regulatory intervention," says Dominic Simpson, Vice President -- Senior Credit Officer at Moody's.

Moody's uses Solvency II ratios adjusted for the impact of transitionals (aka "fully loaded") as a measure of economic capital. However, for some business models, including life insurance and especially UK life insurance, the rating agency sees these adjusted Solvency II ratios as less relevant to measure economic capital. In addition the new disclosures will not provide enough information to perform "perfect" comparisons of Solvency II ratios, especially between countries.

The UK and German life insurance sectors will likely appear as among the most reliant on transitionals, and Moody's expects insurers in these countries to provide additional explanation to give comfort to various stakeholders. In particular Moody's expects some UK life insurers to report Solvency II ratios potentially well below 100% when adjusted for transitionals and Long Term Guarantee measures. Also, the German life market is very reliant on transitional measures, although Moody's rated German insurers are not. That said, it could appear that some of German insurers (most likely small or medium-sized players) will have a Solvency II ratio below 100% without transitionals.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

April 28 21:00 UTC Released

MXFiscal Balance (Pesos)*

Actual

340.61 bln MXN

Forecast

Previous

-1.93 bln MXN

April 28 21:00 UTC Released

CNFiscal Balance (Pesos)*

Actual

340.61 bln MXN

Forecast

Previous

-1.93 bln MXN

April 30 01:00 UTC 9494m

CNNBS Non-Mfg PMI*

Actual

Forecast

Previous

55.10 %

April 30 01:00 UTC 9494m

CNNBS Manufacturing PMI*

Actual

Forecast

51.6 bln $

Previous

51.8 bln $

April 30 23:30 UTC 14441444m

AUAIG Manufacturing Index

Actual

Forecast

Previous

57.5 %

May 1 00:00 UTC 14741474m

KRExport Growth Prelim*

Actual

Forecast

15.3 %

Previous

13.6 %

May 1 00:00 UTC 14741474m

KRImport Growth Prelim*

Actual

Forecast

21.0 %

Previous

27.7 %

May 1 00:00 UTC 14741474m

KRTrade Balance Prelim*

Actual

Forecast

Previous

6.27 bln $

May 1 00:30 UTC 15041504m

USNikkei Mfg PMI

Actual

Forecast

Previous

52.8 %

May 1 00:30 UTC 15041504m

JPNikkei Mfg PMI

Actual

Forecast

Previous

52.8 bln $

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.