Year-end 2023 financial results – Life Insurers' Solvency II and other disclosures

Year-End financial disclosures offer valuable insights into the performance and strategies of companies, therefore it is important to analyse on sector and segmented basis for comparability.

This KPMG report analyses the Year-End 2023 Solvency II disclosures of 15 UK life insurers, providing an overview of their solvency and new business performance, alongside their strategies to optimise capital generation. With 2023 marking the first full year of IFRS 17 reporting, this report draws comparison between Solvency II and IFRS 17, particularly focusing on new business reporting, risk margin, and hedging strategies. Notably, IFRS 17 has introduced new business Contractual Service Margin (CSM) which can be a useful new business key performance indicator (KPI). However, the definitions of new business measures are not always consistent between Solvency II, IFRS 17 and other metrics, and therefore meaningful comparisons across metrics and companies are not straightforward. This report can be read in conjunction with Insurers’ full-year reporting under IFRS 17 and IFRS 9.

James Isden

Partner, Insurance

KPMG in the UK

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While previous disclosures at Year-End 2022 reflected the impact of volatile economic environment, the most recent disclosures at Year-End 2023 demonstrate a shift towards organic growth for capital generation. Many insurers have capitalised on increased demand and a favourable interest rate environment, particularly benefiting the bulk annuity market. Longevity assumption changes and Solvency UK reform have also driven improvements to capital coverage ratio over 2023.

This report additionally summarises climate-related financial disclosures including scenarios modelled and targets set for different companies, and provides a comparative overview of the key disclosed variables.