UK and Ireland non-life insurance market remains financially resilient

Written by Adam Cadle

07/09/2023

The average eligible own funds ratio of 100 of the largest non-life insurers in the UK and Ireland is 180%, and total eligible own funds increased from £97bn at the end of 2021 to £101bn at the end of 2022, LCP’s seventh annual analysis of Solvency II reporting has revealed.

The risks that firms are still navigating include inflation, which was mentioned by 96% of firms in their SFCRs, the Ukraine invasion (85%) and cyber risk (76%). There is also increasing emphasis on climate change and other emerging risks like cyber risk and people risk.

Nine per cent of firms highlighted either AI, digitisation or technological developments as an emerging risk.

Matthew Pearlman, partner at LCP, and author of the report, commented: “It is good to see that the top insurers’ financial strength is growing. An important aspect of the SFCR is reporting on the risks that firms face, and this is shown in the increasing emphasis on climate change and other emerging risks like cyber risk and people risk. However, we believe that many firms could increase the quality of the narrative supporting these risks. In particular, very few firms mentioned using stress and scenario testing to quantify these risks.”

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