EIOPA Statistics - Accompanying note Publication references: Published statistics: [Balance sheet], [Premiums, claims and expenses], [Own funds and SCR] Disclaimer: Data is drawn from the published statistics as of the extraction date (revision of historical series may occur). However, in order to produce the graphs and charts used in this note for illustrative or analytical purposes, certain calculations have been carried out. These are documented or available (as formulas) in the data source on EIOPA s website, unless they represent pure summation or aggregation. Any calculation or formula used for this report should not be interpreted to signify any official EIOPA methodology. 1. Balance sheet structure, main items 1 Assets The asset side of the Solvency II balance sheet is split into investments, assets held for unit-linked business and other assets. Investments represent those held by insurers in order to be able to fulfil the promises made to the policy-holder on an on-going basis. This excludes unit-linked business for which the investment risk is assumed by the policyholder. On an EEA wide basis 2, Figure 1 shows that the investment portfolio of insurers is dominated by bonds. Corporate and government bonds together account for more than 60% of the portfolio. 3 1 Note that some undertakings are exempted from quarterly reporting in accordance with Art. 35(6) of Directive 2009/139/EU. This means that the values in this note, which are based on quarterly reported data, may vary slightly from figures reported based on annual reporting. 2 Data covers the EU plus Norway and Liechtenstein. Note that data for Denmark is not included in Y2016 statistics published in this note. 3 Certain categories of investments, such as equity and bond investments are categorized and identified under Solvency II reporting of the balance sheet under Investments (other than assets held for index-linked and unit-linked contracts). However, where insurers hold such assets indirectly via Collective Investment Undertakings or where those investments represent Holdings in related undertakings, including participations, they will be reported under those categories instead. In addition, insurers could hold additional investments of these asset classes under Assets held for index-linked and unit-linked contracts (where the Solvency II reported main balance sheet does not provide an asset breakdown). 1/7
Figure 1: Investment mix by insurers in EEA following S.02 Balance sheet. End 2016. % Source: EIOPA [] Note: Figure does not include unit-linked business. Does not include data for Denmark However, the investments shown in these figures represent only part of the balance sheet. There is also a considerable share of investments for unit-linked business. Table 1 shows the breakdown of total assets into three main categories (investments as shown above, assets held for unit-linked business and other assets). 2/7
Table 1: Main categories of total assets by insurers in per country. End 2016. EUR million and % Investments (other than assets held for index-linked and unitlinked contracts) Assets held for index-linked and unit-linked contracts Other assets Total assets Eur mn. % Eur mn. % Eur mn. % Eur mn. AUSTRIA 102 332.32 73.8% 19 607.14 14.1% 16 736.81 12.1% 138 676.27 BELGIUM 244 859.86 75.0% 31 777.22 9.7% 50 012.00 15.3% 326 649.08 BULGARIA 2 280.95 70.9% 59.23 1.8% 878.66 27.3% 3 218.84 CROATIA 4 174.99 79.9% 174.93 3.3% 874.69 16.7% 5 224.61 CYPRUS 1 735.07 45.3% 1 225.64 32.0% 865.44 22.6% 3 826.15 CZECH REPUBLIC 12 096.50 70.7% 2 589.61 15.1% 2 411.48 14.1% 17 097.59 DENMARK N/A N/A N/A N/A N/A N/A N/A ESTONIA 1 008.00 55.4% 630.78 34.7% 179.78 9.9% 1 818.56 FINLAND 35 650.61 47.1% 34 436.36 45.5% 5 574.48 7.4% 75 661.45 FRANCE 2 048 254.59 78.9% 296 670.39 11.4% 250 834.11 9.7% 2 595 759.09 GERMANY 1 808 445.91 83.1% 100 877.74 4.6% 267 846.68 12.3% 2 177 170.33 GREECE 11 116.68 69.6% 2 277.26 14.3% 2 579.76 16.2% 15 973.70 HUNGARY 4 192.21 49.5% 3 645.93 43.0% 635.47 7.5% 8 473.61 IRELAND 78 466.67 22.6% 198 234.53 57.2% 69 882.46 20.2% 346 583.66 ITALY 673 129.27 76.0% 139 464.06 15.8% 72 598.10 8.2% 885 191.43 LATVIA 347.52 57.8% 50.08 8.3% 204.08 33.9% 601.68 LIECHTENSTEIN 2 705.71 9.3% 20 972.67 72.2% 5 355.54 18.4% 29 033.92 LITHUANIA 665.96 52.7% 463.23 36.7% 134.59 10.6% 1 263.78 LUXEMBOURG 52 983.72 23.9% 114 734.67 51.7% 54 030.16 24.4% 221 748.55 MALTA 4 553.95 62.0% 105.66 1.4% 2 691.05 36.6% 7 350.66 NETHERLANDS 271 743.73 53.2% 99 706.23 19.5% 138 920.48 27.2% 510 370.44 NORWAY 128 663.30 74.5% 25 688.49 14.9% 18 456.38 10.7% 172 808.17 POLAND 25 752.60 61.7% 12 212.01 29.3% 3 763.49 9.0% 41 728.10 PORTUGAL 35 294.86 69.2% 11 565.12 22.7% 4 166.13 8.2% 51 026.11 ROMANIA 2 295.71 56.8% 737.31 18.2% 1 009.86 25.0% 4 042.88 SLOVAKIA 4 551.94 69.3% 1 194.56 18.2% 825.54 12.6% 6 572.04 SLOVENIA 5 421.73 69.8% 1 549.65 19.9% 799.75 10.3% 7 771.13 SPAIN 246 620.72 82.6% 15 203.83 5.1% 36 918.54 12.4% 298 743.09 SWEDEN 168 460.45 56.7% 108 521.94 36.5% 20 168.81 6.8% 297 151.20 UNITED KINGDOM 953 898.96 35.2% 1 244 228.63 46.0% 508 771.50 18.8% 2 706 899.09 TOTAL 6 931 704.49 63.3% 2 488 604.90 22.7% 1 538 125.82 14.0% 10 958 435.21 Source: EIOPA []. Other assets include items such as loans and mortgages, re-insurance recoverables/receivables and own shares. See the balance sheet statistics for a full overview. Data for Denmark is not available for Y2016. 3/7
Liabilities Total liabilities consist of technical provisions and other liabilities. This is illustrated on an EEA level in the Figure below. Technical provisions represent the amount of resources to be set aside to pay policy-holder claims and are split into 5 main categories. Other liabilities include debt such as subordinated liabilities and financial liabilities other than debts owed to credit institutions, but also other liabilities such as, for example, deposits from reinsurers. Figure 2: Liability profile insurers in EEA. End 2016. % Source: EIOPA []. Does not included data for Denmark. 4/7
2. Premiums (Non-life) One way of assessing market size is to look at the gross (i.e. before reinsurance) written premiums by country. 4 The Figure below ranks the countries according to the gross premiums written by undertakings in their jurisdiction in 2016. At this stage the figure shows only premiums in the nonlife segment, since life premiums are not available on a consistent basis. There is an on-going process to eliminate some national differences in reporting of life premiums. Figure 3: Non-life GWP (gross written premiums direct business) per country. End 2016 Year to date. Source: EIOPA []. Excluding undertakings with non-standard financial year-end. Reinsurance premiums not included. Data for Denmark is not available for Y2016. 4 Note that written premiums do not represent exact market size as there could be cross-border activities not captured in the solo data (e.g. premiums written outside the national market under freedom to provide services). 5/7
3. Own funds and MCR/SCR ratios Insurance undertakings are required by the Solvency II regulation to hold a certain amount of capital of sufficient quality in addition to the assets they hold to cover the contractual obligations towards policyholders. The amount of capital (called eligible own funds) required is defined by the Minimum Capital Requirement (MCR) and the Solvency Capital Requirement (SCR), which depend on the risks to which the undertaking is exposed. If the amount of eligible own funds falls below the MCR, the insurance license should be withdrawn if appropriate coverage cannot be re-established within a short period of time. 5 Holding enough eligible own funds to cover the SCR enables undertakings to absorb significant losses, even in difficult times. Undertakings compliance with the SCR therefore gives reasonable assurance to policyholders that payments will be made as they fall due. The SCR is calculated either by using a prescribed formula (called the standard formula) or by employing an undertaking-specific partial or full internal model that has been approved by the supervisory authority. Being risk-sensitive the SCR is subject to fluctuations and undertakings are required to monitor it continuously, calculate it at least annually and re-calculate it whenever their overall risk changes significantly. As non-compliance with the MCR jeopardizes policyholders interests, the MCR has to be recalculated quarterly according to a given formula. The ratios shown in Table 2 are computed by dividing the respective eligible own funds by the SCR and MCR figures as reported by the insurance undertakings at the end 2016. 5 If the amount of eligible own funds falls below the MCR and the undertaking fails to re-establish compliance with the MCR within three months, a withdrawal of the insurance license is mandatory in order to guard the interests of policyholders. 6/7
Table 2: MCR and SCR ratios by country. Weighted average and interquartile distribution. End 2016. SCR Ratio MCR Ratio Percentiles Percentiles Weighted Weighted 25th 50th 75th average average 25th 50th 75th AUSTRIA 268% 190% 237% 298% 854% 529% 700% 955% BELGIUM 176% 140% 165% 235% 381% 318% 423% 612% BULGARIA 197% 129% 177% 263% 407% 112% 154% 386% CROATIA 234% 180% 237% 340% 664% 219% 462% 746% CYPRUS 271% 123% 168% 228% 750% 202% 301% 672% CZECH REPUBLIC 225% 161% 211% 288% 666% 188% 399% 640% DENMARK N/A N/A N/A N/A N/A N/A N/A N/A ESTONIA 194% 171% 180% 258% 538% 304% 546% 620% FINLAND 205% 180% 258% 301% 668% 470% 761% 1134% FRANCE 223% 179% 264% 385% 560% 367% 589% 989% GERMANY 331% 202% 276% 411% 900% 482% 710% 1112% GREECE 163% 126% 144% 188% 417% 245% 316% 401% HUNGARY 217% 161% 207% 248% 548% 246% 450% 582% IRELAND 173% 144% 189% 284% 463% 380% 533% 732% ITALY 217% 138% 174% 228% 540% 298% 402% 531% LATVIA 142% 127% 143% 157% 278% 113% 282% 341% LIECHTENSTEIN 233% 151% 210% 297% 702% 382% 517% 630% LITHUANIA 193% 138% 181% 202% 473% 265% 366% 445% LUXEMBOURG 219% 151% 224% 338% 631% 389% 577% 899% MALTA 352% 153% 217% 346% 866% 156% 504% 732% NETHERLANDS 176% 153% 192% 261% 428% 324% 453% 755% NORWAY 210% 178% 261% 385% 511% 334% 458% 734% POLAND 260% 153% 203% 277% 828% 261% 427% 805% PORTUGAL 155% 131% 164% 189% 428% 262% 348% 484% ROMANIA 175% 144% 170% 288% 385% 177% 244% 407% SLOVAKIA 226% 175% 229% 269% 568% 397% 509% 681% SLOVENIA 240% 182% 234% 292% 702% 452% 637% 772% SPAIN 238% 182% 237% 323% 601% 369% 597% 812% SWEDEN 265% 178% 214% 266% 933% 365% 579% 828% UNITED KINGDOM 153% 147% 188% 321% 456% 330% 526% 738% TOTAL 228% 156% 217% 326% 618% 343% 534% 824% Source: EIOPA []. The weighted average represents the aggregate own funds (sum of all undertakings) divided by aggregate SCR or MRC respectively. The percentiles represent the interquartile range (25 th to 75 th percentile) and the median (50 th percentile). Data for Denmark is not available for Y2016. 7/7