Avon Insurance plc: SFCR Compendium 2016

2016

Baseline year

No narrative SFCR exists for 2016: Avon's publication is an 11-page QRT-disclosures document (balance sheet, premiums and claims, technical provisions, claims development, own funds, SCR and MCR templates and a general-information sheet). The 2016 baseline is therefore QRT-only: own funds GBP 31.7m, SCR GBP 8.3m, ratio 381%, total assets GBP 76.3m.

The 2016 baseline is a set of tables. Avon's first-year publication contains no Summary, no directors' certification or narrative of any kind, and no comparators, an 11-page disclosure document whose general-information sheet states the essentials: Standard Formula SCR, local GAAP, “No use of matching adjustment ... No use of volatility adjustment” and no transitional measures [QRT]. The balance sheet shows total assets of GBP 76,311k against liabilities of GBP 44,657k for an excess of GBP 31,654k [QRT], own funds that cover the GBP 8,303k SCR 3.8 times [CALC], the QRT stating the ratio as 381% [QRT], and a book dominated by income protection, GBP 28,166k of the GBP 29,038k gross direct written premium, with the medical expense column blank and fire and other damage to property at GBP 1k, heavily ceded to reinsurers (GBP 10,727k ceded, GBP 18,311k retained net) [QRT]. The NFU Mutual Group's own 2016 publication is described in the note below this year [Note 1]. Narrative history for Avon begins only with the 2017 single Group SFCR, which chose not to state 2016 comparators for Avon's ratio.

Business & Performance

Note: No narrative exists. The 2016 figures on this card are taken from the QRT (balance sheet, own funds and SCR templates). The 2016 disclosure document gives no profit figure; the only 2016 Avon profit figure is the comparator in the 2017 Summary, GBP 47.5m [Note 1].

Capital Management

Note: EOF GBP 31,654k, SCR GBP 8,303k, MCR GBP 3,332k, ratio 381%. All [QRT]; no stated-ratio sentence exists for 2016.

Headline metrics

SCR coverage [QRT]381%no narrative statement exists, Note 1

EOF / SCR / Surplus [QRT]GBP 31.7m / 8.3m / 23.4mMCR GBP 3.3m

SCR basis [QRT]Standard Formula (stated on the disclosure sheet)no matching or volatility adjustment; no transitionals

Profit after taxNo 2016 figure publishedthe 2017 Summary later gives GBP 47.5m

New (2)

QRT-disclosures-only publication: a general information sheet plus the balance sheet, premiums and claims (by line of business and by country), non-life technical provisions, claims development, own funds, SCR and MCR templates.

Disclosure sheet states: local GAAP accounting; Standard Formula SCR; no matching adjustment, volatility adjustment or transitional measures for Avon solo.

Notes this year (1)

Note 1 · No narrative SFCR exists for 2016: the Avon publication is an 11-page QRT-disclosures document and the group equivalent a 16-page one, neither with a Summary. The 2016 card is QRT-only; the 2017 Group document states a 2016 Avon comparator for profit only (results table 'Avon 2017 9.1 / 2016 47.5' and '£9.1m (2016: profit of £47.5m)'), and no 2016 comparator for Avon's own funds or coverage ratio.

Outside the Summary

From the NFU Mutual Group's separate 2016 disclosure document, general information sheet (pp.1-2)

The Group's 2016 publication is also a disclosures-only document, 16 pages of templates with no narrative. Its general information sheet gives the method of calculation of the group SCR as “Partial internal model”, with “Use of matching adjustment”, “No use of volatility adjustment” and “Use of transitional measure on technical provisions” (Group 2016 disclosure document, pp.1-2).

Was this 2016 analysis useful or accurate?

2017

Delta from 2016

⭳ SFCR PDF

The first narrative document of the series: a single Group SFCR under PRA waiver 2202893 covering the Group, NFU Mutual and Avon, with a five-part Summary. Group profit GBP 540m and a 216% ratio; Avon's profit falls to GBP 9.1m after 2016's subsidiary-closure dividends, with own funds of GBP 35m and a stated ratio of 531%.

The 2017 document sets the template every later year follows: one report for three regulated perspectives, “prepared as a single Group SFCR in compliance with waiver 2202893 granted by the PRA with effect from 1 January 2016” [SFCR p.5]*, the waiver number appearing this once and never again. The Summary's five sections each end with an Avon sentence or two, and those sentences establish the entity's standing profile: profit “of £9.1m (2016: profit of £47.5m) ... primarily driven by strong underwriting profits”, the 2016 figure inflated by “dividends received in that period following the closure of its subsidiary companies” [SFCR p.11]*; own funds “risen, slightly, to £35m” [SFCR p.12]*; and a coverage ratio “increased over the reporting period to a value of 531% at the reporting date”, with own funds “well above the Solvency Capital Requirement at all times” [SFCR p.12]*. The Group frame around it, “£7,054m” of own funds, a “216%” ratio, Mutual Bonus up 10% with equities sold to hold risk appetite [SFCR p.11-12]*, is the story the Summary actually tells; Avon is a footnote to a mutual, which is precisely what a ratio-based ranking surfaces.

Introduction (SFCR pp. 5)

New: “This report is prepared as a single Group SFCR in compliance with waiver 2202893 granted by the PRA with effect from 1 January 2016.” [SFCR p.5]*, the constitutive sentence of the whole series standard text. NFU Mutual defined as both insurer and Group.

Business & Performance (SFCR pp. 11)

New: Results table for Group / NFU Mutual / Avon; Group profit “£540m (2016: profit of £1,026m)”; GI underwriting result “£101m (2016: £151m)” [SFCR p.11]* standard text.

New: Avon's profit sentence: “£9.1m (2016: profit of £47.5m) ... The 2016 reported profit was significantly higher as a result of dividends received in that period following the closure of its subsidiary companies.” [SFCR p.11]* standard text.

System of Governance (SFCR pp. 11)

New: The governance paragraph (Board accountability, delegation, Risk Governance Framework committees) with the closing sentence “The Group system of governance oversees the risks within NFU Mutual and Avon Insurance plc.” [SFCR p.11]* standard text standard text.

Risk Profile (SFCR pp. 11-12)

New: Mutual Bonus narrative: “In 2017 we increased Mutual Bonus by 10%”, SCR allowance for reduced renewal premiums, equity sales to hold risk at appetite; “Market Risk continues to be the risk category requiring the most capital.” [SFCR p.11-12]* standard text.

New: The standing Avon sentence: “There has been no significant change to Avon Insurance plc risk profile over the period. The major risks are Underwriting Risk and Market Risk.” [SFCR p.12]* standard text.

Valuation (SFCR pp. 12)

New: “Group and NFU Mutual Own Funds have increased significantly ... to a value of £7,054m and £6,963m ... Avon Insurance Own Funds have also risen, slightly, to £35m.” [SFCR p.12]* [QRT verified: 34.6]

Capital Management (SFCR pp. 12)

New: Group ratio “216% ... and 213% for NFU Mutual”; “For Avon Insurance, the Solvency II coverage ratio has increased over the reporting period to a value of 531% at the reporting date.” [SFCR p.12]* [QRT verified: 531]

Headline metrics

Avon SCR coverage (stated)531%2016 [QRT only]: 381%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 34.6m / 6.5m / 28.1m2016 [QRT]: 31.7m / 8.3m / 23.4m

Avon profit after taxGBP 9.1m2016: GBP 47.5m (subsidiary-closure dividends)

Group ratio / profit after tax216% / GBP 540m2016 comparators: profit GBP 1,026m

New (4)

The single Group SFCR structure itself: 'a single Group SFCR in compliance with waiver 2202893 granted by the PRA with effect from 1 January 2016', the only year the waiver number is printed.

Five-part Summary (Business and Performance / System of Governance / Risk Profile / Valuation / Capital Management), each section covering Group, NFU Mutual and Avon.

Avon's standing one-line profile: results table column, profit sentence, own-funds sentence, ratio sentence, the fixed format for the rest of the series.

Mutual Bonus narrative: 10% increase; SCR allowance for reduced renewal premiums; equity sales to hold overall risk at appetite.

Changed (1)

Avon profit normalises to GBP 9.1m against 2016's GBP 47.5m, which was 'significantly higher as a result of dividends received in that period following the closure of its subsidiary companies'.

Was this 2017 analysis useful or accurate?

2018

Delta from 2017

⭳ SFCR PDF

The Group's first loss year of the series, GBP 290m after tax on the Q4 2018 market downturn, against a GI underwriting result up to GBP 142m (2017: GBP 101m). The Summary's risk section is rewritten in plainer language, with the 1-in-200 SCR explanation spelt out. Avon: profit GBP 6.8m, own funds GBP 33m, stated ratio 556%.

2018 separates underwriting from investment fortune for the first time: “The Group made a loss after tax of £290m (2017: profit of £540m) and loss of £292m (2017: profit of £542m) for NFU Mutual on a UK GAAP basis reflecting unrealised losses following the downturn in investment markets in the final quarter of the year”, even as “The General Insurance Business delivered a strong performance with an underwriting result of £142m (2017: £101m)” [SFCR p.10]*. The mutual's ratio absorbs it, “decreased ... to a value of 200% (2017: 216%)” [SFCR p.11]*, and own funds fall to “£6,706m (2017: £7,054)” [SFCR p.11]*. The Summary also finds its explanatory voice: the risk section now walks through the product lines and defines the SCR as capital to survive “an adverse 1-in-200 year event (that is, an event that would be expected to happen only once in every 200 years)” [SFCR p.10]*, wording that survives, nearly verbatim, to 2025. Avon's profit slips to “£6.8m ... partially offset by unrealised losses on investments” [SFCR p.10]*, but its stated ratio rises to “556%” [SFCR p.11]*, a rise the Summary does not explain; the Avon SCR is given elsewhere in the report, shown in the note below this year.

Introduction (SFCR pp. 5)

Changed: The waiver citation loses its number: “in compliance with a waiver granted by the PRA” (2017: “waiver 2202893 ... with effect from 1 January 2016”) [SFCR p.5]* standard text; a sentence is added that the Group “covers regulated, ancilliary and other insurance and reinsurance companies” (as spelt).

Business & Performance (SFCR pp. 10)

Changed: Group loss “£290m (2017: profit of £540m)” on Q4 market falls; GI underwriting result “£142m (2017: £101m)” [SFCR p.10]*.

Changed: Avon: “the profit for the period after tax of £6.8m (2017: profit of £9.1m) was primarily driven by strong underwriting profits in the year partially offset by unrealised losses on investments.” [SFCR p.10]* standard text.

System of Governance (SFCR pp. 10)

Changed: Closing sentence rewords to “The Group system of governance includes the risks within NFU Mutual and Avon Insurance plc.” (2017: “oversees”) [SFCR p.10]* standard text.

Risk Profile (SFCR pp. 10-11)

New: Plain-language rewrite, product lines listed; risks “underwriting risk, market risk, credit risk and liquidity risk”; the 1-in-200 SCR definition introduced [SFCR p.10-11]* standard text standard text.

Changed: “The most significant change to the Group risk profile ... is a decrease in the exposure to market risk due to investment performance over 2018.” The standing Avon sentence recurs standard text [SFCR p.11]*.

Valuation (SFCR pp. 11)

Changed: Group and NFU Mutual own funds “decreased ... to a value of £6,706m (2017: £7,054) and £6,602m (2017: £6,963)”; “Avon Insurance Own Funds have decreased slightly, to £33m (2017: £35).” [SFCR p.11]* [QRT verified: 32.9]

Capital Management (SFCR pp. 11)

Changed: Group ratio “decreased ... to a value of 200% (2017: 216%)”; “For Avon Insurance, the Solvency II coverage ratio has increased over the reporting period to a value of 556% at the reporting date.” [SFCR p.11]* [QRT verified: 556]

Headline metrics

Avon SCR coverage (stated)556%2017: 531%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 32.9m / 5.9m / 26.9m2017: 34.6m / 6.5m / 28.1m

Avon profit after taxGBP 6.8m2017: GBP 9.1m

Group ratio / result after tax200% / GBP 290m loss2017: 216% / GBP 540m profit

New (1)

Plain-language risk section: products listed by business line, the four risks named, and the SCR explained as capital to survive 'an adverse 1-in-200 year event (that is, an event that would be expected to happen only once in every 200 years)'.

Changed (4)

Group swings to a GBP 290m loss (2017: GBP 540m profit) on 'unrealised losses following the downturn in investment markets in the final quarter of the year'; GI underwriting result up to GBP 142m.

Group ratio down to 200% (2017: 216%); own funds GBP 6,706m.

Avon own funds down to GBP 33m; stated ratio up to 556%; profit driver now 'partially offset by unrealised losses on investments'.

Governance closing sentence rewords 'oversees' to 'includes': 'The Group system of governance includes the risks within NFU Mutual and Avon Insurance plc.'

Dropped (1)

The 2017 Mutual Bonus narrative (10% increase; renewal-premium SCR allowance; equity sales to hold risk appetite).

Outside the Summary

From elsewhere in the same report, outside the Summary

Section E.2, Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) (p.99): “The SCR for Avon Insurance (calculated using the Standard Formula) is £5.9m (2017: £6.5m).” [SFCR p.99]*

Section A.1.c, External Auditor (p.12): the external auditor is “Deloitte LLP” [SFCR p.12]*; the 2017 report named PricewaterhouseCoopers LLP in the same section (2017 report, p.13).

Was this 2018 analysis useful or accurate?

2019

Delta from 2018

⭳ SFCR PDF

Rebound and a first sight of Covid: the Group returns to a GBP 573m profit on investment recovery, the Internal Model is named as the SCR engine, and a post-balance-sheet Coronavirus paragraph reports an estimated 180% Group ratio at 31 March 2020. Avon's stated ratio climbs to 591% as its own funds ease to GBP 31.8m.

2019 closes the pre-Covid series with symmetry, “a profit after tax of £573m (2018: loss of £290m) and a profit of £578m (2018: loss of £292m) for NFU Mutual on a UK GAAP basis” as markets gave back what they had taken [SFCR p.11]*, and then breaks the fourth wall with the series' first true post-balance-sheet event: “the outbreak of Coronavirus negatively impacted Financial markets across the world ... NFU Mutual remains solvent and its Solvency Coverage Ratio remains strong at an estimated 180% at the 31st March 2020. ... No adjustment has been made to the 2019 figures” [SFCR p.12]*, a 21-point [CALC] real-time drawdown from the reported “201% (2018: 200%)” [SFCR p.12]*. The capital machinery also becomes explicit: risks are quantified “by using NFU Mutual’s Solvency II capital model – the Internal Model” [SFCR p.12]*; the Summary does not say which models the Group and Avon use (see the note below this year). Avon itself: profit “£8.1m (2018: profit of £6.8m)”, the new “after tax but before dividends” qualifier, own funds “£31.8m (2018: £32.9m)” and a ratio of “591%” [SFCR p.11-12]*.

Introduction (SFCR pp. 5)

Note: Single-SFCR framing unchanged; the waiver is cited without its number standard text; the 2017 document remains the only year to print 'waiver 2202893' [SFCR p.5].

Business & Performance (SFCR pp. 11)

Changed: Group PAT “£573m (2018: loss of £290m)”; GI underwriting result “£167m (2018: £142m)” [SFCR p.11]*.

Changed: Avon: “the profit for the period after tax but before dividends of £8.1m (2018: profit of £6.8m) was primarily driven by strong underwriting profits in the year” [SFCR p.11]*, the pre-dividends qualifier appears for the first time standard text.

System of Governance (SFCR pp. 11)

Note: Governance paragraph and Avon-inclusion sentence carried over unchanged standard text standard text [SFCR p.11].

Risk Profile (SFCR pp. 11-12)

Changed: Narrative rebuilt: products plus “a significant investment portfolio”; risks “underwriting risk, market risk, credit risk, and liquidity risk”; quantified via “NFU Mutual’s Solvency II capital model – the Internal Model” [SFCR p.11-12]* standard text standard text.

New: Coronavirus post-balance-sheet paragraph, estimated Group ratio “180% at the 31st March 2020”; “No adjustment has been made to the 2019 figures reported in this document.” [SFCR p.12]*

Valuation (SFCR pp. 12)

Changed: Group and NFU Mutual own funds “increased ... to a value of £7,364m (2018: £6,706m) and £7,248m (2018: £6,602m)”; “Avon Insurance Own Funds have decreased slightly, to £31.8m (2018: £32.9m).” [SFCR p.12]* [QRT verified: 31.8]

Capital Management (SFCR pp. 12)

Changed: Group ratio “increased slightly to 201% (2018: 200%)”; Avon “increased ... to a value of 591% at the reporting date” [SFCR p.12]*. [QRT verified: 591]

Headline metrics

Avon SCR coverage (stated)591%2018: 556%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 31.8m / 5.4m / 26.4m2018: 32.9m / 5.9m / 26.9m

Avon profit after tax (pre-dividends)GBP 8.1m2018: GBP 6.8m

Group ratio / profit after tax201% / GBP 573m2018: 200% / GBP 290m loss

New (3)

Coronavirus post-balance-sheet paragraph: markets impacted in early 2020; estimated Group Solvency Coverage Ratio 'strong at an estimated 180% at the 31st March 2020'; no adjustment to 2019 figures.

The Internal Model named in the risk section ('NFU Mutual's Solvency II capital model – the Internal Model').

'after tax but before dividends' qualifier added to Avon's profit line.

Changed (3)

Group PAT GBP 573m (2018: GBP 290m loss); GI underwriting result GBP 167m (2018: GBP 142m); own funds GBP 7,364m.

Avon ratio up to 591% (2018: 556%); own funds GBP 31.8m (2018: GBP 32.9m).

Risk-profile narrative rebuilt around the investment portfolio ('The Company also has a significant investment portfolio which includes a variety of asset classes').

Dropped (1)

The 2018 first-person risk wording ('We quantify the risks using our Solvency II capital model'), replaced by the Internal Model description, and 'protection' from the Life product list ('investment, pension and protection products' becomes 'investment and pension products'). The 2017 Mutual Bonus narrative dropped in 2018 and is recorded on the 2018 card, not here.

Outside the Summary

From section E.4 of the same report, Internal Model Details (p.97)

“The Group and NFU Mutual use a Partial Internal Model. Avon Insurance uses the Standard Formula.” [SFCR p.97]*

Was this 2019 analysis useful or accurate?

2020

Delta from 2019

⭳ SFCR PDF

Covid-19 dominates: the Group posts a GBP 143m loss after paying a GBP 252m Mutual Bonus, equity exposure is cut in response to the pandemic, and a dedicated Covid section describes the operational response. Avon barely moves, profit GBP 8.0m, own funds GBP 31.4m, stated ratio 584%.

2020's Summary is built around the pandemic. The loss line, “a loss after tax of £143m (2019: profit of £573m) and a loss of £123m (2019: profit of £578m) for NFU Mutual on a UK GAAP basis”, is explained as underwriting profit “more than offset by overall investment returns and mutual bonus of £252m paid to our members” [SFCR p.13]*: the mutual kept distributing through the shock. The risk section describes the response in balance-sheet terms, “falls in the equity market and targeted equity sales both in response to the Covid-19 pandemic and as part of the implementation of the revised General Insurance strategic asset allocation” [SFCR p.14]*, and a dedicated section records that “we have protected the Group’s capital position and we remain in a strong position as we enter 2021” [SFCR p.14]*. The Group ratio duly rises to “203% (2019: 201%)” [SFCR p.14]*. Avon barely registers the year: profit “£8.0m (2019: £8.1m)”, own funds “decreased slightly, to £31.4m” and a ratio of “584%” [SFCR p.13-15]*, the standing sentence that its risk profile has not changed significantly is, for once, the whole story.

Introduction (SFCR pp. 5)

Note: Single-SFCR framing unchanged; the PRA is spelt out in full in the waiver sentence [SFCR p.5] standard text.

Business & Performance (SFCR pp. 13)

Changed: Group loss “£143m (2019: profit of £573m)”; GI underwriting result “£109m (2019: £167m)”; “mutual bonus of £252m paid to our members” in the bridge [SFCR p.13]*.

Changed: Avon: “the profit for the period after tax but before dividends of £8.0m (2019: profit of £8.1m) was primarily driven by strong underwriting profits in the year.” [SFCR p.13]* standard text.

System of Governance (SFCR pp. 13)

Note: Governance paragraph and Avon-inclusion sentence carried over unchanged standard text standard text [SFCR p.13].

Risk Profile (SFCR pp. 13-14)

Changed: Heading becomes “The Group Risk Profile”; the risk list swaps liquidity for operational risk: “underwriting risk, market risk, credit risk, and operational risk” [SFCR p.13]* standard text.

New: “Impact of Covid-19 during 2020”, incident management plans, “we have protected the Group’s capital position” [SFCR p.14]*.

Changed: Equity de-risking, market falls plus “targeted equity sales ... in response to the Covid-19 pandemic and as part of the implementation of the revised General Insurance strategic asset allocation” [SFCR p.14]*.

Valuation (SFCR pp. 14)

Changed: Group and NFU Mutual own funds “decreased ... to a value of £7,156m (2019: £7,364m) and £7,038m (2019: £7,248m)”; “Avon Insurance Own Funds have decreased slightly, to £31.4m (2019: £31.8m).” [SFCR p.14]* [QRT verified: 31.4]

Capital Management (SFCR pp. 14-15)

Changed: Group ratio “increased to 203% (2019: 201%)”; “For Avon Insurance, the Solvency II coverage ratio has reduced over the reporting period to a value of 584% at the reporting date.” [SFCR p.15]* [QRT verified: 584]

Headline metrics

Avon SCR coverage (stated)584%2019: 591%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 31.4m / 5.4m / 26.0m2019: 31.8m / 5.4m / 26.4m

Avon profit after tax (pre-dividends)GBP 8.0m2019: GBP 8.1m

Group ratio / result after tax203% / GBP 143m loss2019: 201% / GBP 573m profit

New (3)

'Impact of Covid-19 during 2020' section: incident-management response, protected capital position.

Mutual Bonus quantified in the loss bridge: GBP 252m paid to members.

Equity de-risking narrative: falls in the equity market plus targeted sales into corporate bonds under a revised GI strategic asset allocation.

Changed (4)

Group loss after tax GBP 143m (2019: GBP 573m profit) despite a GBP 109m GI underwriting profit.

Risk-list wording: operational risk replaces liquidity risk in the headline list ('underwriting risk, market risk, credit risk, and operational risk').

Section heading 'The Group Risk Profile' (previously 'Risk Profile').

Avon ratio eases to 584% (2019: 591%); own funds GBP 31.4m.

Dropped (1)

The 2019 'Coronavirus' post-balance-sheet paragraph (replaced by the in-year Covid narrative).

Was this 2020 analysis useful or accurate?

2021

Delta from 2020

⭳ SFCR PDF

A recovery year with a sting in the tail: the Group returns to profit (GBP 182m) and funds under management reach GBP 22.2bn, but Storm Arwen and Brexit/Covid inflation push GI to an GBP 89m underwriting loss. Avon's stated ratio reaches 609%; the document misprints Avon's 2020 own-funds comparator (Note 2).

2021 reads as a mirror image of 2020: investments recover, “funds under management rose by 6.8% to £22.2bn (2020: £20.8bn)”, while underwriting deteriorates, “an underwriting loss of £89m (2020: £109m profit) which reflects a challenging year for claims costs due to the economic and inflationary effects of Brexit and Coronavirus”, compounded by “the surge in claims ... as many of our customers were significantly impacted by Storm Arwen” [SFCR p.12]*. The Group's headline flips back to “a profit after tax of £182m (2020: loss of £143m) and a profit of £176m (2020: loss of £123m) for NFU Mutual on a UK GAAP basis” and the ratio inches to “204% (2020: 203%)” [SFCR p.12-13]*. Avon's paragraph carries the year's one data slip: own funds “decreased slightly, to £30.0m (2020: £31.84m)” [SFCR p.13]*, the bracket misprinting the GBP 31.4m the 2020 document (and the QRT) actually stated [Note 2]. The solo ratio still rises to “609% (2020: 584%)” [SFCR p.13]*, on a solo Standard Formula SCR that falls to GBP 4.9m from GBP 5.4m [QRT]; the Summary states no driver and no SCR figure.

Introduction (SFCR pp. 4)

Changed: The Introduction moves to PDF p.4 (2020: p.5) because the blank page after the cover is dropped; wording unchanged (waiver, unnumbered) [SFCR p.4] standard text.

Business & Performance (SFCR pp. 12)

Changed: Group profit “£182m (2020: loss of £143m)”; FUM “rose by 6.8% to £22.2bn”; premium growth “£1,825m (2020: £1,705m)” against an “underwriting loss of £89m (2020: £109m profit)”, Brexit/Coronavirus inflation and Storm Arwen [SFCR p.12]*.

Changed: “In respect of Avon Insurance plc ... the profit for the period after tax but before dividends of £6.4m (2020: £8.0m) was primarily driven by strong underwriting profits in the year.” [SFCR p.12]* standard text.

System of Governance (SFCR pp. 12)

Note: Governance paragraph and Avon-inclusion sentence carried over unchanged standard text standard text [SFCR p.12].

Risk Profile (SFCR pp. 13)

Note: Risk list (underwriting, market, credit, operational), Internal Model description and standing Avon sentence unchanged standard text standard text standard text; “There has been no material change to the risk profile over the reporting period.” [SFCR p.13]*

Valuation (SFCR pp. 13)

Changed: Group and NFU Mutual own funds “increased ... to a value of £7,284m (2020: £7,156m) and £7,154m (2020: £7,038m)”; “Avon Insurance Own Funds have decreased slightly, to £30.0m (2020: £31.84m)” [SFCR p.13]*, comparator misprint [Note 2]. [QRT verified: 30.0]

Capital Management (SFCR pp. 13)

Changed: Group ratio “204% (2020: 203%)”; Avon “increased ... to a value of 609% (2020: 584%)” [SFCR p.13]*. [QRT verified: 609]

Headline metrics

Avon SCR coverage (stated)609%2020: 584%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 30.0m / 4.9m / 25.0m2020: 31.4m / 5.4m / 26.0m

Avon profit after tax (pre-dividends)GBP 6.4m2020: GBP 8.0m

Group ratio / profit after tax204% / GBP 182m2020: 203% / GBP 143m loss

New (2)

Storm Arwen narrative and the Brexit/Coronavirus inflation framing for claims costs.

Funds-under-management growth metric in the performance paragraph (7% to GBP 22.2bn).

Changed (3)

Group returns to profit: GBP 182m (2020: GBP 143m loss); premium growth to GBP 1,825m but an GBP 89m underwriting loss (2020: GBP 109m profit).

Avon own funds down slightly to GBP 30.0m; stated ratio up to 609% (2020: 584%).

Avon's 2020 own-funds comparator misprinted as GBP 31.84m (2020 document and QRT: GBP 31.4m), Note 2.

Dropped (1)

The Covid-19 operational-response section (2020's 'Impact of Covid-19 during 2020' heading does not recur).

Notes this year (1)

Note 2 · Comparator misprint: the 2021 document states Avon own funds decreased 'to GBP 30.0m (2020: GBP 31.84m)', where the 2020 document and the QRT state GBP 31.4m.

Outside the Summary

From section E.2 of the same report, Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) (p.99)

“The SCR for Avon Insurance (calculated using the Standard Formula) is £4.9m (2020: £5.4m).” [SFCR p.99]*

Was this 2021 analysis useful or accurate?

2022

Delta from 2021

⭳ SFCR PDF

The Group's stress year: a GBP 1,049m loss after tax, funds under management down to GBP 19.2bn, and a GBP 167m underwriting loss on inflation and storms, yet the Group ratio rises to 218%. Avon takes the same hit in miniature: unrealised bond losses cut profit to GBP 1.2m, own funds to GBP 25.5m and the stated ratio to 459%, its decade low. Comparator hygiene slips (Note 3).

2022 shows how a mutual absorbs a market shock. The headline is stark, “The Group made a loss after tax of £1,049m (2021: profit of £182m) and a loss of £1,031m (2021: profit of £176m) for NFU Mutual on a UK GAAP basis” with funds under management down to “£19.2bn (2021: £22.2bn)” and an underwriting loss of “£167m (2021: £89m loss)” [SFCR p.13]*, yet the Solvency II ratio moves up, to “218% (2021: 204%)” [SFCR p.14]*, an increase for which the Summary gives no reason. Avon's miniature version of the same: profit “of £1.2m (2021: £6.4m) reflects unrealised losses on debt securities of £5.6m” [SFCR p.13]*, own funds “decreased to £25.5m, driven by investment performance” [SFCR p.14]*, and a ratio of “459% (2021: 609%)” [SFCR p.14]*, its lowest of the decade, which the Summary attributes to own funds alone: “This is driven by the decrease in Own Funds.” [SFCR p.14]* The solo SCR also rose that year, from GBP 4.9m to GBP 5.6m [QRT], which the Summary does not mention. The comparator column wobbles under the strain: the 2021 Group own funds are quoted as “(2021: £7,138m)” against the GBP 7,284m the 2021 document itself stated, unexplained, and the Group total (GBP 6,087m) lands below the NFU Mutual solo figure (GBP 6,104m) [Note 3].

Introduction (SFCR pp. 5)

Note: Single-SFCR framing unchanged [SFCR p.5] standard text.

Business & Performance (SFCR pp. 13)

Changed: Group loss “£1,049m (2021: profit of £182m)”; FUM “£19.2bn (2021: £22.2bn)”; “Despite good premium growth of £1,987m (2021: £1,825m), 2022 delivered an underwriting loss of £167m (2021: £89m loss) which reflects a challenging year for claims costs due to rising inflation and severe weather.” [SFCR p.13]*

New: “In respect of Avon Insurance plc ... the profit for the year after tax but before dividends of £1.2m (2021: £6.4m) reflects unrealised losses on debt securities of £5.6m.” [SFCR p.13]*, the first quantified driver in Avon's line standard text.

System of Governance (SFCR pp. 13)

Note: Governance paragraph and Avon-inclusion sentence carried over unchanged standard text standard text [SFCR p.13].

Risk Profile (SFCR pp. 13-14)

Note: Risk list (underwriting, market, credit, operational), Internal Model description and the standing Avon sentence unchanged standard text standard text standard text [SFCR p.13-14].

Valuation (SFCR pp. 14)

Changed: “Group and NFU Mutual Own Funds have decreased ... to a value of £6,087m (2021: £7,138m) and £6,104m (2021: £7,154m)” [SFCR p.14]*, the Group comparator restated from the 2021 document's GBP 7,284m, and the Group total below the solo figure [Note 3]. “Avon Insurance Own Funds have decreased to £25.5m, driven by investment performance (2021: £30.0m).” [SFCR p.14]* [QRT verified: 25.5]

Capital Management (SFCR pp. 14)

Changed: Group ratio “increased to 218% (2021: 204%)”; Avon “decreased ... to a value of 459% (2021: 609%) ... driven by the decrease in Own Funds” [SFCR p.14]*. [QRT verified: 459]

Headline metrics

Avon SCR coverage (stated)459%2021: 609%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 25.5m / 5.6m / 19.9m2021: 30.0m / 4.9m / 25.0m

Avon profit after tax (pre-dividends)GBP 1.2m2021: GBP 6.4m

Group ratio / result after tax218% / GBP 1,049m loss2021: 204% / GBP 182m profit

New (1)

Avon driver sentence quantifies the hit: 'reflects unrealised losses on debt securities of £5.6m'.

Changed (3)

Group loss after tax GBP 1,049m (2021: GBP 182m profit); FUM down to GBP 19.2bn (2021: GBP 22.2bn); underwriting loss GBP 167m (2021: GBP 89m) on inflation and severe weather.

Avon own funds down GBP 4.5m to GBP 25.5m; stated ratio 459% (2021: 609%), the low point of the ten years.

2021 Group own-funds comparator restated to GBP 7,138m (2021 document: GBP 7,284m) without explanation, Note 3.

Dropped (1)

The Storm Arwen and Brexit/Coronavirus inflation framing of 2021 (replaced by the 2022 market-volatility narrative).

Notes this year (1)

Note 3 · The 2022 document restates the 2021 Group own-funds comparator to GBP 7,138m against GBP 7,284m as stated in the 2021 document, without explanation. Group own funds (GBP 6,087m) also sit below NFU Mutual solo own funds (GBP 6,104m) at the 2022 reporting date.

Outside the Summary

From section E.2 of the same report, Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) (p.102)

“The SCR for Avon Insurance (calculated using the Standard Formula) is £5.6m (2021: £4.9m).” [SFCR p.102]*

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2023

Delta from 2022

⭳ SFCR PDF

Recovery from the 2022 investment shock: Group own funds rebuild to GBP 6.4bn and the profit line returns (GBP 164m), while GI stays loss-making (GBP 156m underwriting loss) on inflation, storms and large claims. Avon rebounds hardest, own funds up to GBP 27.9m, a lower SCR, stated ratio 672% (2022: 459%).

2023 restores the Group's balance sheet without restoring GI profitability. Own funds rebuild to “£6,394m (2022: £6,087m)” on investment performance, and the profit line flips to “£164m (2022: loss of £1,049m) and a profit of £176m (2022: loss of £1,031m) for NFU Mutual on a UK GAAP basis” [SFCR p.13-14]*, but the underwriting account stays deep in deficit: “an underwriting loss of £156m (2022: £167m loss)” on inflation, end-of-year storms “and an increase in the volume and severity of very large claims” [SFCR p.13]*. Avon's recovery is the sharpest in the series: the ratio jumps from 459% to “672% ... driven by both an increase in Own Funds and a reduction in the SCR” [SFCR p.14]*, the solo Standard Formula requirement falling from GBP 5.6m to GBP 4.1m [QRT]; the Summary states the reduction but gives neither the amounts nor a cause. A small taxonomy change slips into the risk list: “counterparty default risk” replaces credit risk [SFCR p.14], aligning the Summary's language with the Standard Formula module names. The Group ratio itself is flat at “218% (2022: 218%)” [SFCR p.14]*, the two-year picture being a balance-sheet round trip with a higher-inflation claims environment left behind.

Introduction (SFCR pp. 5)

Note: Single-SFCR framing unchanged [SFCR p.5] standard text.

Business & Performance (SFCR pp. 13)

Changed: Group PAT “£164m (2022: loss of £1,049m)”; FUM “5.3% growth (2022: 13.5% decline) ... to £20.2bn (2022: £19.2bn)”; GI underwriting loss “£156m (2022: £167m loss)” on inflation, severe storms and very large claims [SFCR p.13]*.

Changed: Avon's line reduces to the figure alone: “the profit for the year after tax but before dividends of £6.0m (2022: £1.2m).” [SFCR p.13]* standard text.

System of Governance (SFCR pp. 13)

Note: Governance paragraph and Avon-inclusion sentence carried over unchanged standard text standard text [SFCR p.13].

Risk Profile (SFCR pp. 14)

Changed: Risk list now “underwriting risk, market risk, counterparty default risk, and operational risk” [SFCR p.14]* (previously credit risk) standard text; Internal Model description and the standing Avon sentence unchanged standard text standard text.

Valuation (SFCR pp. 14)

Changed: Group and NFU Mutual own funds both “£6,394m” (2022: 6,087 / 6,104); “Avon Insurance plc Own Funds have increased to £27.9m, driven by investment performance (2022: £25.5m).” [SFCR p.14]* [QRT verified: 27.9]

Capital Management (SFCR pp. 14)

Changed: Group ratio “remained consistent at 218% (2022: 218%)”; Avon “672% (2022: 459%) ... driven by both an increase in Own Funds and a reduction in the SCR” [SFCR p.14]*. [QRT verified: 672]

Headline metrics

Avon SCR coverage (stated)672%2022: 459%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 27.9m / 4.1m / 23.7m2022: 25.5m / 5.6m / 19.9m

Avon profit after tax (pre-dividends)GBP 6.0m2022: GBP 1.2m

Group ratio / profit after tax218% / GBP 164m2022: 218% / GBP 1,049m loss

New (2)

Counterparty default risk replaces credit risk in the Group risk list.

'Very large claims' severity narrative in the GI performance paragraph.

Changed (3)

Group PAT recovers to GBP 164m (2022: GBP 1,049m loss); FUM up 5% to GBP 20.2bn after a 14% decline in 2022.

Avon ratio up 213 points to 672%, 'driven by both an increase in Own Funds and a reduction in the SCR' (own funds GBP 27.9m).

Avon's profit paragraph shrinks to a bare figure ('the profit for the year after tax but before dividends of £6.0m (2022: £1.2m)') with no driver sentence.

Dropped (1)

The unrealised-losses-on-debt-securities driver text for Avon (2022's explanation).

Outside the Summary

From section E.2 of the same report, Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) (p.106)

“The SCR for Avon Insurance plc (calculated using the Standard Formula) is £4.1m (2022: £5.6m).” [SFCR p.106]*

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2024

Delta from 2023

⭳ SFCR PDF

The Summary keeps its Solvency II wording. The Group returns to underwriting profit (GBP 168m) and a 221% ratio; Avon's own funds dip to GBP 25.9m and its stated ratio eases to 647%.

2024 is a quiet year for the Summary's framing, which still speaks entirely in “Solvency II coverage ratio” terms [SFCR p.15]. The substance is a recovery story: “The General Insurance business has delivered a profitable underwriting result of £168m (2023: £156m loss) as the business benefited from one-off releases on prior year claims and lower claims frequency” [SFCR p.14]*, lifting Group profit to “£360m (2023: £164m)” and the Group ratio to “221% (2023: 218%)” [SFCR p.15]*. Avon moves the other way, mildly: own funds “decreased to £25.9m, due to investment performance” and the ratio “decreased ... to a value of 647% (2023: 672%) ... driven by a small reduction in Own Funds” [SFCR p.15]*, the SCR itself barely moves (GBP 4.0m [QRT]), so the ratio remains a function of the investment result on a GBP 26m balance sheet.

Introduction (SFCR pp. 5)

Note: Single-SFCR framing unchanged (waiver, unnumbered) [SFCR p.5] standard text.

Business & Performance (SFCR pp. 14)

Changed: Group PAT “£360m (2023: £164m)”; FUM “3.7% growth ... to £20.9bn (2023: £20.2bn)”; GI underwriting result “£168m (2023: £156m loss)” with the storm roll-call: “Storms Henk, Isha and Jocelyn at the beginning of the year and Storms Bert & Darragh towards the end” [SFCR p.14]*.

Changed: “In respect of Avon Insurance plc ... the profit for the year after tax but before dividends of £4.5m (2023: £6.0m).” [SFCR p.14]* standard text.

System of Governance (SFCR pp. 14)

Changed: Committee wording trimmed to “committees from Board level to divisional level” [SFCR p.14]* standard text; Avon-inclusion sentence retained standard text.

Risk Profile (SFCR pp. 15)

Note: Risk list, Internal Model description and the standing Avon sentence carried over unchanged standard text standard text standard text [SFCR p.15].

Valuation (SFCR pp. 15)

Changed: Group and NFU Mutual own funds “increased ... to a value of £6,874m (2023: £6,394m)”, both stated identically; “Avon Insurance plc Own Funds have decreased to £25.9m, due to investment performance (2023: £27.9m).” [SFCR p.15]* [QRT verified: 25.9]

Capital Management (SFCR pp. 15)

Changed: Group ratio “221% (2023: 218%)”; Avon “647% (2023: 672%) ... driven by a small reduction in Own Funds” [SFCR p.15]*. [QRT verified: 647]

Headline metrics

Avon SCR coverage (stated)647%2023: 672%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 25.9m / 4.0m / 21.9m2023: 27.9m / 4.1m / 23.7m

Avon profit after tax (pre-dividends)GBP 4.5m2023: GBP 6.0m

Group ratio / profit after tax221% / GBP 360m2023: 218% / GBP 164m

New (1)

Named-storm narrative (Henk, Isha, Jocelyn; Bert and Darragh) in the GI performance paragraph.

Changed (3)

Group swings to an underwriting profit of GBP 168m (2023: GBP 156m loss) on prior-year releases and lower claims frequency; Group PAT GBP 360m (2023: GBP 164m).

Avon own funds down to GBP 25.9m 'due to investment performance'; stated ratio 647% (2023: 672%), 'driven by a small reduction in Own Funds'.

Committee structure wording trimmed: 'from Board level to divisional level' (previously 'to business unit and divisional level').

Dropped (1)

The 'and an increase in the volume and severity of very large claims' loss narrative of 2023 (the 2024 Summary cites one-off releases on prior year claims and lower claims frequency instead).

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2025

Delta from 2024

⭳ SFCR PDF

The Group's best year of the window, profit after tax GBP 729m, funds under management GBP 22.8bn, Group ratio 238%, carries Avon with it: solo own funds rise to GBP 27.1m for a stated ratio of 689%; the Avon SCR is given outside the Summary (see the note below this year). The FUM comparator misquotes 2024 (Note 4), and the document still reports under Solvency II wording.

2025 is the high-water mark of the Group series and, mechanically, of Avon's ratio. The Group reports “a profit after tax of £729m (2024: £360m)”, a GI “profitable underwriting result of £314m (2024: £168m)” and “an 8.7% growth (2024: 3.7% growth) of funds under management to £22.8bn (2024: £20.2bn)” [SFCR p.13]*, though that bracketed comparator misquotes the 2024 document, which stated GBP 20.9bn; the growth rate itself is consistent with the 20.9 base [Note 4]. Avon's line in the Summary stays characteristically brief: profit “was £4.9m (2024: £4.5m)” [SFCR p.13]*, own funds “increased to £27.1m, due to investment performance” [SFCR p.14]*, and “the Solvency II coverage ratio has increased over the reporting period to a value of 689% (2024: 647%)” [SFCR p.14]*, produced by a mutual group running its smallest subsidiary at roughly seven times [CALC] its Standard Formula requirement of GBP 3.9m [QRT]. Ten years in, the Summary still describes everything in Solvency II terms.

Introduction (SFCR pp. 4)

Note: The single-SFCR framing is unchanged: “This report is prepared as a single Group SFCR in compliance with a waiver granted by the Prudential Regulation Authority (PRA).” [SFCR p.4]* standard text. The waiver number (2202893), last printed in 2017, has not returned.

Business & Performance (SFCR pp. 13)

Changed: “The Group made a profit after tax of £729m (2024: £360m) and a Parent company profit of £720m (2024: £339m) for NFU Mutual Insurance Society Limited on a UK GAAP basis.” [SFCR p.13]*

Changed: FUM “£22.8bn (2024: £20.2bn)” [SFCR p.13]*, comparator inconsistent with the 2024 document's GBP 20.9bn [Note 4].

Changed: “In respect of Avon Insurance plc, an insurance company within the Group, the profit for the year after tax but before dividends was £4.9m (2024: £4.5m).” [SFCR p.13]* standard text.

System of Governance (SFCR pp. 13)

Changed: Governance paragraph rewritten, the Board oversees risk management “through the Risk Management Framework, which consists of governance committees from Board level to divisional level and aims to ensure effective Group wide risk oversight” [SFCR p.13]* standard text; the closing sentence is retained: “The Group system of governance includes the risks within NFU Mutual and Avon Insurance plc.” [SFCR p.13] standard text.

Risk Profile (SFCR pp. 13-14)

Note: Risk list unchanged: “underwriting risk, market risk, counterparty default risk, and operational risk” standard text; Internal Model description shortened (the parenthetical 1-in-200 explanation is dropped); “Market risk continues to be the risk category requiring the most capital.” standard text and the standing Avon sentence: “There has been no significant change to Avon Insurance plc’s risk profile over the period. The major risks are underwriting risk and market risk.” standard text [SFCR p.14].

Valuation (SFCR pp. 14)

Changed: Group and NFU Mutual own funds “increased ... to a value of £7,590m (2024: £6,874m)”; “Avon Insurance plc Own Funds have increased to £27.1m, due to investment performance (2024: £25.9m).” [SFCR p.14]* [QRT verified: 27.1]

Capital Management (SFCR pp. 14)

Changed: “The Group and NFU Mutual Solvency II coverage ratio have increased to 238% (2024: 221%) and to 238% (2024: 221%) respectively”; “For Avon Insurance plc, the Solvency II coverage ratio has increased over the reporting period to a value of 689% (2024: 647%) ... driven by an increase in Own Funds.” [SFCR p.14]* [QRT verified: 689]

Headline metrics

Avon SCR coverage (stated)689%2024: 647%

Avon EOF / SCR [QRT] / Surplus [CALC]GBP 27.1m / 3.9m / 23.2m2024: 25.9m / 4.0m / 21.9m

Avon profit after tax (pre-dividends)GBP 4.9m2024: GBP 4.5m

Group ratio / profit after tax238% / GBP 729m2024: 221% / GBP 360m

New (2)

'Parent company profit' wording for the NFU Mutual solo result; governance paragraph rewritten around the Risk Management Framework ('aims to ensure effective Group wide risk oversight').

2025 storm narrative: a significant event at the start of the year mainly impacting Scotland and Northern Ireland, with modest weather impact thereafter.

Changed (3)

Group profit after tax doubles to GBP 729m (2024: GBP 360m); GI underwriting result GBP 314m (2024: GBP 168m); funds under management up 9% to GBP 22.8bn.

Avon ratio up to 689% (2024: 647%) on higher own funds (GBP 27.1m).

Group and NFU Mutual ratios stated separately ('increased to 238% ... and to 238% ... respectively').

Dropped (1)

The 'Risk Governance Framework' committee-structure wording (replaced by Risk Management Framework phrasing in the governance section).

Notes this year (1)

Note 4 · Funds-under-management comparator inconsistency: the 2025 document states “an 8.7% growth” 'to GBP 22.8bn (2024: GBP 20.2bn)', but the 2024 document stated GBP 20.9bn (with GBP 20.2bn as the 2023 figure). The stated growth rate is consistent with a GBP 20.9bn base.

Outside the Summary

From section E.2 of the same report, Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) (p.105)

“The SCR for Avon Insurance plc (calculated using the Standard Formula) is £3.9m (2024: £4.0m).” [SFCR p.105]*

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Generated by AI. This analysis was produced with AI from the companies’ SFCRs; check any figure against the source report before relying on it.