European insurers’ SII ratios unlikely to be boosted by equity markets rise

Written by Adam Cadle

13/01/2023

European insurers’ Solvency II ratios are unlikely to be boosted by the late-2022 rise in equity markets, according to investment bank Jefferies.

The bank’s analysts expect the movement in symmetric adjustment to “offset substantially” the benefit of Q4’s rising equity values.

The analysts said insurers incur a 39% (for OECD listed assets), or 49% (non-OECD, non-listed) capital charge for equity investments.

The symmetric adjustment in bear markets can cut the charges by up to 10 percentage points however, while in bull markets it can increase by up to 10pp.

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