25% of German life insurers rely on transitional measures to meet solvency requirements under SII

Written by Adam Cadle

20/04/2021

Around 25% of German life insurers rely on transitional measures to meet the solvency requirements under Solvency II, according to Germany’s Federal Financial Supervisory Authority (BaFin).

By the beginning of 2032, these insurers will need to be able to fulfil these requirements without such measures. “They are required to report on their progress – plausibly and clearly,” BaFin said. “They need to get better at doing this.”

All life insurers will have to be able to meet their solvency capital requirement (SCR) with own funds to a minimum of 100%.

BaFin has strongly advised companies not to try for a precision landing in this area.

“There are too many uncertainties as to how the capital market will develop for this to be a sensible move,” it stated.

“Rather, insurers should aim to comply with their SCR without transitional measures before the start of 2032.”

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