Leonidas Akritidis[/caption]
[caption id="attachment_1588126" align="alignleft" width="90"] Ross Shepherd[/caption]
[caption id="attachment_1588123" align="alignleft" width="90"]
Hugh Skipper[/caption]
In early May 2018 the UK Office for National Statistics (ONS) made a presentation to the Solvency II Wire Data User Group meeting* on the first set of statistics on the financial assets and liabilities of the UK insurance sector.
The presentation followed the publication of experimental financial statistics1 on 30 April 2018, based on quarterly data collected under Solvency II as the Europe-wide insurance regulatory framework.
This pioneering work by the ONS represents one of first significant steps of using Solvency II data outside of the insurance sector. In this article, Leonidas Akritidis, Hugh Skipper and Ross Shepherd, members of the ONS team that compiled and presented the work, share their insights on the data and interactions with industry.
Introduction to ONS use of Solvency II data
The ONS, in cooperation with the Bank of England, has recently concluded that Solvency II data are suitable for UK national accounts compilation. This includes a wide range of insurance sector statistics on contribution to UK Gross Domestic Product and detailed financial statistics. Solvency II therefore has the potential to replace some existing ONS insurance surveys, which would reduce the survey compliance burden. It should be noted that Solvency II includes data from insurers that act mainly as pension fund managers. For national accounts purposes, these should not be classified in the UK insurance sector. Hence, the experimental statistics exclude approximately 11 such insurers/fund managers. The experimental Solvency II-based financial statistics for the UK insurance sector are shown in table 1.Table 1: Assets and liabilities of the UK insurance corporations sector (in £ billion)
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Stocks of assets
Figure 1 and table 1 illustrate that the most important types of assets in Quarter 4 2016 were:- debt securities (30%, £0.5 trillion), of which the majority were non-government issued
- investment fund shares/units (28%, £0.5 trillion)
- technical reserve assets (reinsurance recoverables) (15%, £0.3 trillion)
- listed and unlisted shares and equity (12%, £0.2 trillion)
Figure 1: Share of assets of UK insurers in Quarter 4 2016
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Stocks of liabilities
Figure 2 and table 1 illustrate that the largest component of liabilities was technical reserves, which accounted for over 80% of total liabilities in Quarter 4 2016. Within this, the largest sub-category was the technical reserves for unit and index linked life insurance and pensions products.Figure 2: Share of liabilities of UK insurers in Quarter 4 2016
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