The Ocean Marine Insurance Company Limited: SFCR Compendium 2016

2016

Baseline year

Baseline: a fully reinsured Aviva run-off book with EOF GBP 114m against an SCR of GBP 5m, a stated ratio of 2,282%, protected by NICo reinsurance and a GBP 1bn ARD agreement with AIL; stated surplus of GBP 99m, restated to GBP 109m in the 2017 Summary (p.4).

The 2016 baseline sets out the structure that shapes every later year: a closed London Market book, “The Company ceased to accept business in the London Market in 1995” [SFCR p.3]*, wholly reinsured with NICo since 2000 and further protected by “an extra £1 billion of reinsurance cover” under the ARD agreement with AIL [SFCR p.3]*, which together “provide substantial protection in excess of current gross liabilities” [SFCR p.3]*. Own funds of “£114m”, all unrestricted Tier 1, stand against an SCR of “£5m” calculated on an Internal Model [SFCR p.4]. The stated “overall surplus position was £99m” [SFCR p.4]* does not reconcile with those figures (difference c. GBP 109m) and is restated to GBP 109m in the 2017 Summary (p.4 of that report) [Note 1]; the stated ratio of “2,282%” sits a point below the QRT's 2283% [QRT]. Uniquely in the series, ‘underwriting’ appears in the risk-type list, “credit, underwriting, liquidity and operational risks” [SFCR p.4]*, before being dropped in 2017.

Introduction (SFCR pp. 3)

Note: Baseline purpose sentence: “The purpose of the Solvency and Financial Condition Report (SFCR) is to provide information about the capital position of the Company at 31 December 2016 based on the Solvency II (SII) requirements.” [SFCR p.3]* Standardised in 2017 standard text.

Business & Performance (SFCR pp. 3)

Note: Principal activity “the run-off of general insurance claims”; “The Company ceased to accept business in the London Market in 1995.” [SFCR p.3]*

Note: “All business is wholly reinsured through reinsurance agreements entered into with National Indemnity Company (NICo) in 2000”, with the ARD agreement providing “an extra £1 billion of reinsurance cover” against NICo exhaustion or failure: “Together these arrangements provide substantial protection in excess of current gross liabilities.” [SFCR p.3]* standard text.

Note: Profit before tax “£2m” comprising “an underwriting result of £nil, net investment income of £2m and other costs of £nil”; investment income from interest and “unrealised exchange rate gains on cash and deposits denominated in US dollars (USD)” [SFCR p.3]*.

System of Governance (SFCR pp. 3)

Note: Governance framed through the “'three lines of defence' model” with the Board setting risk appetite itself standard text; four key control functions: “Risk, Actuarial, Compliance and Internal Audit”; governance “over the use of its Internal Model (IM)” [SFCR p.3]* standard text.

Risk Profile (SFCR pp. 4)

Note: Risk types “remain credit, underwriting, liquidity and operational risks” with market risk immaterial [SFCR p.4]*, the only year underwriting appears in the list standard text; liquidity risk measured “through absolute liquidity coverage relative to pre-defined appetites” standard text [SFCR p.4].

Valuation (SFCR pp. 4)

Note: SII valuation principle stated as the amount for which assets and liabilities “could be exchanged, transferred or settled by knowledgeable and willing third parties in an arm's length transaction” standard text; Technical Provisions equal Best Estimate Liability plus Risk Margin standard text; excess of assets over liabilities “£114m”, “£1m lower than the value under IFRS” [SFCR p.4]*.

Capital Management (SFCR pp. 4)

Note: “the Company has chosen to implement an IM to calculate solvency capital requirements for its business” [SFCR p.4]* standard text; EOF “£114m” all unrestricted Tier 1 standard text; SCR “£5m”.

Note: “The overall surplus position was £99m which translates to a regulatory cover ratio of 2,282%.” [SFCR p.4]* EOF less SCR is c. GBP 109m; the 2017 Summary (p.4 of that report) restates the 2016 surplus as GBP 109m [Note 1]. [QRT: ratio 2283%]

Headline metrics

SCR coverage (stated)2282%QRT: 2283%

EOF / SCRGBP 114m / 5mall unrestricted Tier 1

Surplus (stated)GBP 99mrestated to GBP 109m in the 2017 Summary (p.4), Note 1

Profit before taxGBP 2mno comparative stated (2016 is the first SFCR year; not a Summary statement)

New (3)

First SFCR: run-off entity (ceased London Market business 1995), wholly reinsured with NICo since 2000, GBP 1bn ARD agreement with AIL.

Internal Model basis for the SCR; own funds entirely unrestricted Tier 1.

Risk types: credit, underwriting, liquidity and operational; market risk immaterial.

Notes this year (1)

Note 1 · Summary states an overall surplus of GBP 99m against EOF GBP 114m and SCR GBP 5m (difference c. GBP 109m); the 2017 SFCR restates the 2016 surplus as GBP 109m. Charts use QRT figures.

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2017

Delta from 2016

⭳ SFCR PDF

The 2016 surplus is restated from GBP 99m to GBP 109m; 'underwriting' leaves the risk-type list; the purpose sentence takes its standard form.

2017's most substantive item is a correction: the surplus comparator is given as “(2016 restated: £109m)” [SFCR p.4]*, against the “£99m” stated in the 2016 SFCR, consistent with EOF of GBP 114m less an SCR of GBP 5m, and with the QRT [QRT] [Note 1]. The 2016 ratio is also restated a point higher, at “2,283%” against 2016's own “2,282%”. Wording settles in two places that hold for the rest of the series: the purpose sentence becomes “to provide information required by the Solvency II (SII) regulatory framework” [SFCR p.3]* standard text, and ‘underwriting’ leaves the risk-type list, which becomes “credit, liquidity and operational risks” with underwriting and market exposure “immaterial” [SFCR p.4]* standard text. Profit falls to “£nil (2016: £2m)” with “other costs” of GBP 1m from “unrealised foreign exchange losses on US Dollar (USD) interest bearing assets” [SFCR p.3]*.

Introduction (SFCR pp. 3)

Changed: The purpose sentence takes its standard form: “The purpose of the Solvency and Financial Condition Report (SFCR) is to provide information required by the Solvency II (SII) regulatory framework and in particular the capital position of The Ocean Marine Insurance Company Limited (the Company) at 31 December 2017.” [SFCR p.3]* (2016: “to provide information about the capital position of the Company… based on the Solvency II (SII) requirements”) standard text.

Business & Performance (SFCR pp. 3)

Changed: Principal activity reworded: “the management of the Company's existing general insurance claims liabilities through to run-off” [SFCR p.3]* (2016: “the run-off of general insurance claims”); the not-writing-new-business clause is added.

Changed: “The Company's profit before tax for the year ended 31 December 2017 of £nil (2016: £2m) comprises an underwriting result of £nil… net investment income of £1m… and other costs of £1m”, the other costs arising “from unrealised foreign exchange losses on US Dollar (USD) interest bearing assets” [SFCR p.3]*.

New: “There have been no significant business or other events during the year which have had a material effect on the Company.” [SFCR p.3]* (standard text; retained through 2025).

System of Governance (SFCR pp. 3-4)

New: “There have been no material changes in the system of governance during the year” [SFCR p.4]* (standard text; the 2016 Summary carried no such statement).

Note: The six bullets are otherwise unchanged, including “governance over the use of its Internal Model (IM)” standard text [SFCR p.4].

Risk Profile (SFCR pp. 4)

Changed: The risk-type sentence drops ‘underwriting’: “remain credit, liquidity and operational risks. The Company's exposure to underwriting and market risk continues to be immaterial.” [SFCR p.4]* (2016: “credit, underwriting, liquidity and operational risks” with market risk immaterial) standard text.

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£114m (2016: £114m)”, “£1m (2016: £1m) lower than the value under IFRS” [SFCR p.4]* standard text standard text.

Capital Management (SFCR pp. 4)

Changed: “The overall surplus position was £109m (2016 restated: £109m) which translates to a regulatory cover ratio of 2,398% (2016: 2,283%).” [SFCR p.4]* The 2016 SFCR had stated a surplus of GBP 99m and a ratio of 2,282% [Note 1]. [QRT verified: ratio 2398%, matches]

Headline metrics

SCR coverage (stated)2398%2016 (as stated in 2017 SFCR): 2283%

EOF / SCR / SurplusGBP 114m / 5m / 109m2016 restated: 114m / 5m / 109m

Profit before taxGBP nil2016: GBP 2m

2016 surplus restatedGBP 109m2016 SFCR stated: GBP 99m, Note 1

New (2)

'There have been no significant business or other events during the year' statement (kept through 2025).

No-material-changes governance statement.

Changed (4)

2016 surplus restated: '(2016 restated: GBP 109m)' against the GBP 99m stated in the 2016 SFCR.

Purpose sentence standardised: information 'required by the Solvency II (SII) regulatory framework'.

Risk-type list drops 'underwriting': now credit, liquidity and operational, with underwriting and market immaterial.

Principal activity reworded to 'management of the Company's existing general insurance claims liabilities through to run-off'.

Outside the Summary

From the cover page of the same report (p.1)

The cover page carries the marking “Aviva: Confidential” [SFCR p.1]*. The same marking is on the cover of the 2018 report; the covers of the 2019 to 2025 reports do not carry it.

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2018

Delta from 2017

⭳ SFCR PDF

Reporting moves from GBP m to GBP thousands; the principal-activity wording settles on 'settlement of its existing general insurance liabilities'; ratio eases to 2267% on a slightly higher SCR.

2018 is a presentational year: the Summary's figures switch from rounded GBP millions to GBP thousands, the 2017 SFCR's “£114m” becomes “£114,631 thousand” [SFCR p.3]*, which materially sharpens the visible precision of the capital position without changing it. The principal-activity sentence settles into the form it keeps for the rest of the window: “the settlement of its existing general insurance liabilities, with the Company having ceased to accept business in the London Market in 1995 and is currently not writing (nor projected to write) new business” [SFCR p.2]*. Profit before tax of “£1,063 thousand (2017: loss £286 thousand)” is driven by the NICo receivable discount unwind and “£520 thousand foreign exchange gains (2017: losses of £804 thousand)” [SFCR p.2]*, the FX swing that dominates this book's P&L throughout. The stated ratio of “2,267% (2017: 2,398%)” matches the QRT [QRT].

Introduction (SFCR pp. 2)

Note: Purpose paragraph unchanged standard text [SFCR p.2]. The Summary begins on PDF page 2 this year (no separate contents page).

Business & Performance (SFCR pp. 2)

Changed: Principal activity reworded: “the settlement of its existing general insurance liabilities” [SFCR p.2]* (2017: “the management of the Company's existing general insurance claims liabilities through to run-off”). This wording persists through 2025.

Changed: Figures move to GBP thousands: profit before tax “£1,063 thousand (2017: loss £286 thousand)”, underwriting loss “£31 thousand (2017: loss of £33 thousand)”, discount unwind “£525 thousand”, FX gains “£520 thousand” [SFCR p.2]*.

System of Governance (SFCR pp. 2-3)

Note: Bullets unchanged, retaining “governance over the use of its Internal Model (IM)” standard text [SFCR p.3].

Risk Profile (SFCR pp. 3)

Note: Unchanged from 2017 standard text standard text [SFCR p.3].

Valuation (SFCR pp. 3)

Changed: Excess of assets over liabilities “£114,631 thousand (2017: £113,770 thousand)”, “£420 thousand (2017: £420 thousand) lower than the value under IFRS” [SFCR p.3]*, the SII-vs-IFRS gap first quantified at thousand-level precision (2017: “£1m”).

Capital Management (SFCR pp. 3)

Changed: EOF “£114,631 thousand (2017: £113,770 thousand)” all unrestricted Tier 1 standard text; SCR “£5,056 thousand (2017: £4,745 thousand)”; surplus “£109,575 thousand (2017 £109,025 thousand)”; “regulatory cover ratio of 2,267% (2017: 2,398%)” [SFCR p.3]*. [QRT verified: ratio 2267%, matches]

Headline metrics

SCR coverage (stated)2267%2017: 2398%

EOF / SCR / SurplusGBP 114.6m / 5.1m / 109.6m2017: 113.8m / 4.7m / 109.0m

Profit before taxGBP 1,063k2017: loss GBP 286k

UnitsGBP thousands2016-2017: GBP m

Changed (3)

Presentation currency unit: figures now stated in GBP thousands (2016-2017: GBP m).

Principal activity reworded to 'the settlement of its existing general insurance liabilities' with no new business written nor projected.

Profit description led by the NICo receivable discount unwind (GBP 525k) and FX gains (GBP 520k).

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2019

Delta from 2018

⭳ SFCR PDF

A GBP 25m dividend, the first distribution disclosed in the series, cuts EOF to GBP 90.0m and the ratio to 1805%; COVID-19 arrives as a post-balance-sheet 'major development' with a new appendix F.5.

2019 is the year the capital story changes shape: after three years of EOF held at c. GBP 114m, the Company distributes “interim dividends of £25,000 thousand” declared “On 8 April 2019” [SFCR p.3]*, and both the Valuation and Capital sections attribute the fall in own funds to it: “The decrease was mainly due to payment of a dividend of £25,000 thousand” [SFCR p.4]*. The stated ratio of “1,805% (2018: 2,267%)” [SFCR p.4]* matches the QRT [QRT]. Although it covers 2019, the Summary brackets the year with pandemic text that refers to events of March 2020: the front section notes the figures “have therefore not been adjusted for any impacts of COVID-19” and that “On 23 March 2020 the PRA announced that COVID-19 should be treated as a ‘major development’ as per Article 54(1) of the Solvency II Directive” [SFCR p.3]*, pointing to a new appendix F.5, and a closing “Other information” paragraph points to continuing economic disruption, including the slip “there insurance arrangements” for what reads as ‘the reinsurance arrangements’ [SFCR p.5].

Introduction (SFCR pp. 3)

New: A COVID-19 paragraph is inserted after the purpose sentence: the WHO “declared the outbreak of a strain of novel coronavirus disease, COVID-19, a global pandemic” on 11 March 2020; figures “have therefore not been adjusted for any impacts of COVID-19 including any impacts on technical provisions”; and “On 23 March 2020 the PRA announced that COVID-19 should be treated as a ‘major development’ as per Article 54(1) of the Solvency II Directive” [SFCR p.3]*. Section F.5 is added for COVID-19 information.

Business & Performance (SFCR pp. 3)

New: “On 8 April 2019 the directors declared interim dividends of £25,000 thousand on the Company's ordinary shares, all of which was settled in cash.” [SFCR p.3]* This is the first distribution disclosed in the Summary in this window.

Changed: Underwriting result “£nil thousand (2018: loss of £31 thousand)”; profit before tax “£232 thousand (2018: £1,063 thousand)” driven by the “unwind of discount of £549 thousand on the receivable due from NICo (2018: £525 thousand)” and a “£346 thousand foreign exchange loss (2018: gains of £520 thousand)” [SFCR p.3]*.

System of Governance (SFCR pp. 3-4)

Note: Bullets unchanged from 2018, retaining “governance over the use of its Internal Model (IM)” standard text [SFCR p.4].

Risk Profile (SFCR pp. 4)

Note: Unchanged from 2018: “policyholders” lead, risk types “credit, liquidity and operational”, underwriting and market immaterial standard text [SFCR p.4].

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£90,021 thousand (2018: £114,631 thousand)”; “The decrease was mainly due to payment of a dividend of £25,000 thousand.” [SFCR p.4]*

Capital Management (SFCR pp. 4-5)

Changed: EOF “£90,021 thousand (2018: £114,631 thousand)” all unrestricted Tier 1 standard text, “mainly due to payment of a dividend of £25,000 thousand”; SCR “£4,988 thousand (2018: £5,056 thousand)”; surplus “£85,033 thousand”; “regulatory cover ratio of 1,805% (2018: 2,267%)” [SFCR p.4]*. [QRT verified: ratio 1805%, matches]

New: A closing “Other information” paragraph on COVID-19's economic disruption, noting the arrangements in place “limit the sensitivity to economic shocks” but that the impact “will require continual monitoring” [SFCR p.5]*, the paragraph contains the slip “there insurance arrangements”.

Headline metrics

SCR coverage (stated)1805%2018: 2267%

EOF / SCR / SurplusGBP 90.0m / 5.0m / 85.0m2018: 114.6m / 5.1m / 109.6m

DividendGBP 25.0m declared 8 April 2019first distribution disclosed in the series

Profit before taxGBP 232k2018: GBP 1,063k

New (3)

Interim dividends of GBP 25,000k declared 8 April 2019, settled in cash, the first distribution disclosed in the 2016-2025 window.

COVID-19 post-balance-sheet framing: WHO pandemic declaration (11 March 2020), PRA 'major development' announcement (23 March 2020), and a new appendix F.5.

Closing 'Other information' paragraph on the pandemic's economic disruption.

Changed (1)

EOF down 21% to GBP 90,021k, 'mainly due to payment of a dividend of GBP 25,000 thousand'; ratio 1805% (2018: 2267%).

Outside the Summary

From section F.3 of the same report, Directors' Statement (p.46)

The Directors' Statement is signed by T J Latter, Director, and dated “7 April 2020” [SFCR p.46]*: the report was signed after the pandemic declaration of 11 March 2020 that the Summary cites.

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2020

Delta from 2019

⭳ SFCR PDF

COVID-19 wording spreads to every section except the introduction's purpose paragraph; a second GBP 25m distribution takes EOF to GBP 65.4m; the stated SCR (GBP 5,417k) and ratio (1207%) diverge from the QRT (GBP 5,147k / 1271%); the governance bullet flips from Internal Model to standard formula.

2020 is the most heavily edited Summary of the window, and the year where the stated figures and the QRT part company. The stated SCR of “£5,417 thousand” and “regulatory cover ratio of 1207%” [SFCR p.4]* sit against a QRT SCR of GBP 5,147k and an implied ratio of 1271% [QRT] [Note 2], the only year in the series where the stated SCR and cover ratio do not reconcile with the QRT within rounding. The 2016 stated surplus also fails to reconcile, recorded separately as Note 1. The EOF fall to “£65,388 thousand (2019: £90,021 thousand)” is attributed to “an interim dividend distribution of £25,000 thousand paid during the year” [SFCR p.4]*, yet the Summary carries the declaration date “8 April 2019” [SFCR p.3]*, the same date as the 2019 dividend, while the QRT shows EOF falling by c. GBP 25m in each of 2019 and 2020, consistent with two separate distributions [Note 3]. Editorially, COVID-19 wording is inserted into every section except the introduction’s purpose paragraph, which is unchanged, and the governance bullet flips from “its Internal Model (IM)” to “the standard formula” while Capital Management still states an IM is used [Note 4], an inconsistency that persists to 2025. Two typographical slips complete the picture [Note 5] [Note 6].

Introduction (SFCR pp. 3)

Note: Purpose paragraph unchanged standard text [SFCR p.3].

Business & Performance (SFCR pp. 3)

Changed: The distribution sentence reads “On 8 April 2019 the directors declared interim dividends of £25,000 thousand on the Company's ordinary shares, all of which was settled in cash” [SFCR p.3]*, identical to the 2019 SFCR, while the Valuation and Capital sections describe a distribution “paid during the year” [SFCR p.4]* [Note 3].

New: The COVID-19 impact paragraph (limited impact given the nature of the business; residual impact mitigated by reinsurance) appears for the first time in 2020. The 2019 Summary carries no Business and Performance COVID-19 paragraph; its only COVID-19 text is the opening paragraph and the closing Other information note [SFCR p.3].

Changed: Underwriting result described as a loss of “£35 thousand (2019: loss of £31 thousand)”; the 2019 SFCR had stated its own 2019 net underwriting result as GBP nil [SFCR p.3].

System of Governance (SFCR pp. 3-4)

Changed: The model-governance bullet now reads “its governance over the use of the standard formula” [SFCR p.4]* (2016-2019: “its governance over the use of its Internal Model (IM)”), while the Capital Management section continues to state “the Company has chosen to implement an IM” [Note 4].

Changed: The control functions bullet renames “Risk” to “Risk Management”; delegation is described to “management within the Aviva Group” (previously “the Group”) standard text [SFCR p.3].

New: “Given the nature of the Company's business, the impact of COVID-19 is limited and no significant changes to governance arrangements were considered necessary.” [SFCR p.4]*

Risk Profile (SFCR pp. 4)

Changed: The lead sentence now refers to “protecting its customers from risk” (2016-2019: “policyholders”); “accepts” and “receives” replace the past tense [SFCR p.4].

New: “There is no significant impact from the COVID-19 pandemic.” [SFCR p.4]*

New: “The Company's exposure to underwriting risk, being the management of claims and adequacy of reserves, is mitigated by its quota share arrangement with National Indemnity Company.” [SFCR p.4]*

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£65,388 thousand (2019: £90,021 thousand)”, the decrease “driven by an interim dividend distribution of £25,000 thousand paid during the year” [SFCR p.4]*. The comparator for the SII-vs-IFRS difference is misprinted as “(2019: £420,000 thousand)” [Note 5].

New: “The impact of COVID-19 is not considered to be significant given the nature of the business historically underwritten by the Company.” [SFCR p.4]*

Capital Management (SFCR pp. 4-5)

Changed: EOF “£65,388 thousand (2019: £90,021 thousand)”, the sentence contains the duplication “was represented was represented” [Note 6]; SCR stated as “£5,417 thousand (2019: £4,988 thousand)” and surplus “£59,971 thousand” giving “a regulatory cover ratio of 1207% (2019: 1805%)” [SFCR p.4]*. The QRT records SCR GBP 5,147k and ratio 1271% [QRT] [Note 2].

New: “There have been no material changes to the objectives, policies or processes of the Company for managing its Own Funds during the year.” [SFCR p.4]* standard text; the COVID-19 own-funds sentence is added.

Changed: Capital objectives reworded, financial strength “to support new business growth” and capital allocated “to support value adding growth and repatriate excess capital where appropriate”, with “customers” replacing “policyholders” standard text [SFCR p.4].

Headline metrics

SCR coverage (stated)1207%2019: 1805%

SCR coverage (QRT)1271%Note 2

EOF / SurplusGBP 65.4m / 60.0m (stated)2019: 90.0m / 85.0m

DistributionGBP 25.0m 'paid during the year'declaration dated 8 April 2019, Note 3

New (3)

COVID-19 paragraphs added to Business and Performance, Governance, Risk Profile, Valuation and Capital Management.

Underwriting-risk mitigation sentence added to the Risk Profile: mitigated by the quota share arrangement with National Indemnity Company.

No-material-changes statement for Own Funds management objectives, policies and processes.

Changed (4)

Governance bullet: governance over 'the standard formula' (2016-2019: 'its Internal Model (IM)'), while Capital Management retains the IM statement.

'Policyholders' becomes 'customers' in the Risk Profile lead and the capital objectives; 'Risk' control function renamed 'Risk Management'.

Capital objectives reworded: financial strength to 'support new business growth'; capital allocated to 'support value adding growth'.

EOF down 27% to GBP 65,388k after a second GBP 25.0m distribution.

Notes this year (5)

Note 2 · Summary states SCR GBP 5,417k and cover ratio 1207%; the QRT records SCR GBP 5,147k, implying 1271%. The 2021 SFCR repeats GBP 5,417k as its comparator. Charts use the QRT figures.

Note 3 · The 2020 EOF decrease is attributed to a GBP 25,000k dividend 'paid during the year', but the Summary carries the declaration date 8 April 2019, the same date as the dividend disclosed in the 2019 SFCR. EOF fell by c. GBP 25m in both 2019 and 2020.

Note 4 · From 2020 the System of Governance bullet refers to governance over 'the standard formula' while the Capital Management section continues to state the Company uses an Internal Model. The inconsistency persists through 2025.

Note 5 · Valuation comparator misprint: '(2019: GBP 420,000 thousand)' for the SII-vs-IFRS valuation difference; prior and later years state GBP 420 thousand.

Note 6 · Capital Management wording duplication: 'all of which was represented was represented by unrestricted tier 1 capital'.

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2021

Delta from 2020

⭳ SFCR PDF

A quiet carry-over year: COVID-19 wording retained throughout, no dividend, cover ratio recovers to 1299% (stated) as EOF edges up and the stated SCR falls slightly.

2021 is a carry-over year: the COVID-19 sentences added in 2020 stand unchanged in all five sections, no distribution is disclosed, and own funds edge up to “£66,030 thousand (2020: £65,388 thousand)” [SFCR p.4]*. The stated cover ratio recovers to “1299% (2020: 1207%)” [SFCR p.4]*, noting that the 2020 comparator SCR of “£5,417 thousand” repeats the figure that differs from the QRT's GBP 5,147k [Note 2]; the 2021 figures themselves match the QRT (ratio 1299%) [QRT]. Profit before tax of “£642 thousand (2020: £323 thousand)” is again described through the NICo receivable discount unwind (“£600 thousand”) and foreign exchange [SFCR p.3]*.

Introduction (SFCR pp. 3)

Note: Purpose paragraph unchanged standard text [SFCR p.3].

Business & Performance (SFCR pp. 3)

Changed: “The profit before tax for the year of £642 thousand (2020: £323 thousand), is driven by the unwind of discount of £600 thousand on the receivable due from NICo (2020: £574 thousand)… offset by primarily £78 thousand foreign exchange gains (2020: losses of £215 thousand)” [SFCR p.3]*.

Dropped: The dividend sentence carried in 2019 and 2020 does not appear, no distribution is disclosed for 2021 [SFCR p.3].

Note: The COVID-19 impact paragraph added in 2020 is retained verbatim [SFCR p.3].

System of Governance (SFCR pp. 3-4)

Note: Bullets unchanged, including the “standard formula” governance wording [Note 4] standard text; the COVID-19 governance sentence is retained [SFCR pp.3-4].

Risk Profile (SFCR pp. 4)

Note: Unchanged from 2020, including “There is no significant impact from the COVID-19 pandemic” and the quota-share mitigation sentence [SFCR p.4].

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£66,030 thousand (2020: £65,388 thousand)”, “£420 thousand (2020: £420 thousand) lower than the value under IFRS” [SFCR p.4]*, the comparator misprint of 2020 does not recur [Note 5].

Capital Management (SFCR pp. 4-5)

Changed: EOF “£66,030 thousand (2020: £65,388 thousand)” all unrestricted Tier 1 standard text; SCR “£5,082 thousand (2020: £5,417 thousand)”, the 2020 comparator repeats the figure that differs from the QRT [Note 2]; surplus “£60,948 thousand (2020: £59,971 thousand)”; “regulatory cover ratio of 1299% (2020: 1207%)” [SFCR p.4]*. [QRT verified: 2021 ratio 1299%, matches]

Headline metrics

SCR coverage (stated)1299%2020 (stated): 1207%

EOF / SCR / SurplusGBP 66.0m / 5.1m / 60.9m2020: 65.4m / 5.1m [QRT] / 60.2m [CALC]; the 2021 Summary prints 65,388 / 5,417 / 59,971

Profit before taxGBP 642k2020: GBP 323k

DividendNone disclosed2020: GBP 25.0m distribution

Changed (2)

Cover ratio 1299% (2020 stated: 1207%); EOF GBP 66,030k; stated SCR GBP 5,082k (2020 stated: GBP 5,417k).

Profit before tax GBP 642k driven by the GBP 600k NICo receivable discount unwind and FX gains of GBP 78k.

Dropped (1)

The dividend disclosure (2019 and 2020 Summaries each carried a GBP 25,000k distribution).

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2022

Delta from 2021

⭳ SFCR PDF

COVID-19 disappears from the Summary; the SCR falls below the MCR and the stated 1951% cover ratio is measured against the MCR (the 2023 Summary later describes the MCR as 2022’s biting constraint; the 2022 Summary does not use the term); MCR figures enter the Summary for the first time.

2022 removes the pandemic and changes the yardstick. Every COVID-19 sentence introduced across 2019-2021 is gone, restoring the pre-pandemic Summary structure. On capital, the SCR fell 35% to “£3,283 thousand (2021: £5,082 thousand)” [SFCR p.4]*, taking it below the MCR of GBP 3,445k, so the Summary states “The overall surplus position to MCR… was £63,758 thousand (2021 surplus to SCR: £60,948 thousand) which translates to a regulatory cover ratio of 1951% (2021: 1299%)” [SFCR p.4]*. The stated 1951% is therefore an MCR-basis figure; the SCR-basis ratio from the QRT is 2047% [QRT]. This is also the first year the MCR is stated in the Summary at all. The profit story is presentational as much as economic: PBT of “£1,770 thousand” is described through the “unwind of discount of £628 thousand on the receivable due from NICo (2021: £600 thousand)” and “£1,061 thousand foreign exchange gains (2021: gains of £78 thousand)” [SFCR p.3]*.

Introduction (SFCR pp. 3)

Note: Purpose paragraph unchanged standard text [SFCR p.3].

Business & Performance (SFCR pp. 3)

Changed: The profit description now leads with the underwriting result: “The Company's underwriting result net of reinsurance… is a loss of £34 thousand (2021: loss of £26 thousand). The profit before tax for the year of £1,770 thousand (2021: £642 thousand), is driven by the unwind of discount of £628 thousand on the receivable due from NICo (2021: £600 thousand) together with non-underwriting investment gains and losses, and primarily £1,061 thousand foreign exchange gains (2021: gains of £78 thousand)” [SFCR p.3]*.

Dropped: The COVID-19 impact paragraph (2020-2021) is removed [SFCR p.3].

System of Governance (SFCR pp. 3-4)

Dropped: The sentence that no governance changes were considered necessary given COVID-19 (2020-2021) is removed; the six bullets and no-material-changes statement stand standard text standard text [SFCR p.3].

Risk Profile (SFCR pp. 4)

Dropped: “There is no significant impact from the COVID-19 pandemic.” (2020-2021) is removed [SFCR p.4].

Note: Risk types remain “credit, liquidity and operational risks” standard text; the quota-share mitigation sentence stands [SFCR p.4].

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£67,203 thousand (2021: £66,030 thousand)”, “£1,016 thousand (2021: £420 thousand) lower than the value under IFRS” [SFCR p.4]*; the COVID-19 valuation sentence is dropped.

Capital Management (SFCR pp. 4)

New: MCR stated in the Summary for the first time: “The Company's MCR, at 31 December 2022, was £3,445 thousand (2021: £3,126 thousand).” [SFCR p.4]*

Changed: “The overall surplus position to MCR, as at 31 December 2022, was £63,758 thousand (2021 surplus to SCR: £60,948 thousand) which translates to a regulatory cover ratio of 1951% (2021: 1299%).” [SFCR p.4]* The SCR-basis ratio from the QRT is 2047% [QRT].

Dropped: The COVID-19 own-funds sentence (2020-2021) is removed [SFCR p.4].

Headline metrics

Cover ratio (stated, to MCR)1951%2021 (to SCR): 1299%

EOF / SCR / MCRGBP 67.2m / 3.3m / 3.4m2021: 66.0m / 5.1m / 3.1m

Surplus (to MCR)GBP 63.8m2021 (to SCR): GBP 60.9m

Profit before taxGBP 1,770k2021: GBP 642k

New (2)

MCR disclosed in the Summary for the first time: GBP 3,445k (2021: GBP 3,126k).

Surplus and cover ratio stated against the MCR, which the SCR fell below during the year.

Changed (2)

SCR down 35% to GBP 3,283k (2021: GBP 5,082k); stated ratio 1951% to the MCR (QRT SCR-basis: 2047%).

Profit description led by the underwriting result and the NICo receivable discount unwind (GBP 628k) plus FX gains of GBP 1,061k.

Dropped (1)

All five COVID-19 paragraphs (Business and Performance, Governance, Risk Profile, Valuation, Capital Management), present since 2019-2020.

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2023

Delta from 2022

⭳ SFCR PDF

The biting constraint flips back from MCR to SCR as the SCR rises 31% [CALC] to GBP 4.3m; the stated cover ratio moves from an MCR-basis 1951% to an SCR-basis 1591%; MCR now a regular Summary disclosure.

2023's defining disclosure is about which capital floor binds. The Summary states: “The increase in the SCR, described in Section E, has led to the biting solvency constraint changing from the MCR in 2022 to the SCR in 2023.” [SFCR p.4]* With the SCR up 31% [CALC] to GBP 4,290k and EOF broadly stable at GBP 68.3m [QRT], the stated “regulatory cover ratio of 1591% (2022: 1951%)” [SFCR p.4]* compares an SCR-basis figure with an MCR-basis one, the QRT SCR-basis ratio for 2022 was 2047% [QRT], so on a like-for-like SCR basis the ratio fell further than the stated pair suggests. The 2022 comparator is itself relabelled: the surplus is given as “(2022: £63,758 thousand against the MCR)” [SFCR p.4]*. Otherwise the Summary is close to a verbatim carry-over of 2022, including the full risk-profile paragraph set and the COVID-free text adopted that year.

Introduction (SFCR pp. 3)

Note: Purpose paragraph unchanged (“Solvency II (SII) regulatory framework”) standard text [SFCR p.3].

Business & Performance (SFCR pp. 3)

Changed: The profit description returns to a profit-before-tax lead: “an IFRS profit before tax of £662 thousand (2022: profit £1,778 thousand)” comprising “an underwriting profit of £20 thousand (2022: £590 thousand loss) net investment income of £815 thousand (2022: £1,803 thousand) and other activities expense of £173 thousand (2022: £565 thousand income)” [SFCR p.3]*. The restated 2022 underwriting comparative differs materially from the loss of GBP 34k the 2022 SFCR itself reported. The 2022 report had led with the underwriting result and the NICo receivable discount unwind.

Note: The 2022 comparator PBT is stated as GBP 1,778k; the 2022 SFCR stated GBP 1,770k. Difference GBP 8k, not separately explained [SFCR p.3].

System of Governance (SFCR pp. 3-4)

Note: Governance bullets and no-material-changes statement unchanged standard text standard text [SFCR p.3].

Risk Profile (SFCR pp. 4)

Note: Risk-profile paragraphs unchanged from 2022, including “credit, liquidity and operational risks” standard text and the quota-share mitigation sentence [SFCR p.4].

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£68,269 thousand (2022: £67,203 thousand)”, “£621 thousand (2022: £1,016 thousand) lower than the value under IFRS” [SFCR p.4]*.

Capital Management (SFCR pp. 4)

New: “The increase in the SCR, described in Section E, has led to the biting solvency constraint changing from the MCR in 2022 to the SCR in 2023.” [SFCR p.4]*

Changed: EOF “£68,269 thousand (2022: £67,203 thousand)” all unrestricted Tier 1 standard text; SCR “£4,290 thousand (2022: £3,283 thousand)”; MCR “£3,495 thousand (2022: £3,445 thousand)”; surplus “£63,979 thousand (2022: £63,758 thousand against the MCR)”; “regulatory cover ratio of 1591% (2022: 1951%)” [SFCR p.4]*. [QRT verified: ratio 1591%, matches]

Headline metrics

SCR coverage (stated)1591%2022 (MCR basis): 1951%

EOF / SCR / SurplusGBP 68.3m / 4.3m / 64.0m2022: 67.2m / 3.3m / 63.8m (to MCR)

MCRGBP 3.5m2022: GBP 3.4m

IFRS profit before taxGBP 662k2022: GBP 1,778k

New (1)

Biting-constraint disclosure: the SCR increase moves the binding solvency constraint from the MCR (2022) back to the SCR (2023).

Changed (2)

SCR up 31% [CALC] to GBP 4,290k (2022: GBP 3,283k); stated ratio 1591% on the SCR basis (2022 stated: 1951% to the MCR).

Profit description returns to the profit-before-tax lead format: PBT GBP 662k comprising underwriting profit GBP 20k, investment income GBP 815k, other activities expense GBP 173k.

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2024

Delta from 2023

⭳ SFCR PDF

Solvency UK arrives and the SCR jumps 61% [CALC]: a methodology review means the AIL receivable is stressed in full, taking the SCR to GBP 6.9m and the cover ratio from 1592% to 997%.

2024 is the year the numbers move for a stated methodological reason. The SCR rose 61% [CALC] to “£6,908 thousand (2023: £4,290 thousand)” because, “Following a review of the Ocean Marine methodology, the AIL receivable is now stressed in its entirety which explains the majority of the increase in the SCR” [SFCR p.4]*, so the fall in the cover ratio from four figures to “997%” [SFCR p.4]* reflects the stated change in how the AIL receivable is stressed, not a deterioration in own funds, which edged up to GBP 68.9m [QRT]. The same paragraph introduces a negative diversification benefit between counterparty and operational risks, “both of which are highly skewed” [SFCR p.4]*. Alongside the capital move, the report adopts the new regime language, the final PRA rules for Solvency UK “became effective from 31 December 2024” [SFCR p.3]*, and two wording shifts warrant notes: the 2023 comparator ratio is stated as 1592% where the 2023 report said 1591% [Note 7], and the underwriting-risk mitigation is re-attributed to “its ARD arrangement with National Indemnity Company” [SFCR p.4]* although the ARD agreement is elsewhere described as being with AIL [Note 8].

Introduction (SFCR pp. 3)

New: A Solvency UK paragraph is added: “In the United Kingdom (UK) the final Prudential Regulation Authority (PRA) rules for Solvency UK became effective from 31 December 2024, completing the review by the PRA of Solvency II and replacing assimilated law inherited from the European Union.” [SFCR p.3]* The document states “'Solvency UK' has been referred to in this document except for where referring to our Solvency II results” [SFCR p.3]*.

Changed: The purpose sentence now refers to “the Solvency II (UK) regulatory framework” (2023: “the Solvency II (SII) regulatory framework”) standard text [SFCR p.3].

Business & Performance (SFCR pp. 3)

Changed: IFRS profit before tax “£570 thousand (2023: profit £662 thousand)”, comprising an underwriting loss of GBP 150k, net investment income of GBP 720k and other activities of GBP nil [SFCR p.3]*.

Note: Run-off, NICo reinsurance and GBP 1bn ARD boilerplate unchanged standard text [SFCR p.3].

System of Governance (SFCR pp. 3-4)

Note: Governance bullets unchanged, retaining the “standard formula” governance reference alongside the Internal Model statement in Capital Management [Note 4] standard text [SFCR pp.3-4].

Risk Profile (SFCR pp. 4)

Dropped: The paragraph “The Company receives premiums which are invested in order to maximise risk-adjusted returns… the Company has a preference for retaining those risks which it believes it is capable of managing to generate a return” (present 2016-2023) is removed [SFCR p.4].

Changed: Underwriting-risk mitigation re-worded: “mitigated by its ARD arrangement with National Indemnity Company” [SFCR p.4]* (2020-2023: “quota share arrangement with National Indemnity Company”). The Business and Performance section describes the ARD agreement as being with AIL [Note 8].

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£68,860 thousand (2023: £68,269 thousand)”, “£600 thousand (2023: £621 thousand) lower than the value under IFRS” [SFCR p.4]*.

Capital Management (SFCR pp. 4)

Changed: SCR “£6,908 thousand (2023: £4,290 thousand)”, up 61% [CALC], with EOF “£68,860 thousand” and surplus “£61,952 thousand (2023: £63,979 thousand)”; “regulatory cover ratio of 997% (2023: 1592%)” [SFCR p.4]*. The 2023 SFCR stated 1591% [Note 7]. [QRT verified: ratio 997%, matches]

New: “Following a review of the Ocean Marine methodology, the AIL receivable is now stressed in its entirety which explains the majority of the increase in the SCR.” [SFCR p.4]* The paragraph also introduces the negative diversification benefit “between counterparty and operational risks (both of which are highly skewed)” [SFCR p.4]*.

Headline metrics

SCR coverage (stated)997%2023 (as stated in 2024 SFCR): 1592%

EOF / SCR / SurplusGBP 68.9m / 6.9m / 62.0m2023: 68.3m / 4.3m / 64.0m

MCRGBP 3.5m2023: GBP 3.5m

IFRS profit before taxGBP 570k2023: GBP 662k

New (3)

Solvency UK framing paragraph: final PRA rules effective 31 December 2024, replacing assimilated EU law; 'Solvency UK' terminology adopted.

SCR methodology change: following a review, the AIL receivable is stressed in its entirety, explaining the majority of the SCR increase.

Diversification disclosure: negative diversification benefit between counterparty and operational risks, increased on the prior year.

Changed (3)

SCR up 61% [CALC] to GBP 6,908k (2023: GBP 4,290k); cover ratio 997% (stated 2023 comparator: 1592%).

Risk Profile mitigation wording: underwriting risk now described as mitigated by the 'ARD arrangement' (previously 'quota share arrangement') with National Indemnity Company.

Regulatory label: 'Solvency II (UK)' regulatory framework referenced in the purpose paragraph.

Dropped (1)

The Risk Profile paragraph on receiving premiums for investment and the preference for retaining risks (present 2016-2023).

Notes this year (2)

Note 7 · The 2024 Summary states the 2023 comparator ratio as 1592%; the 2023 SFCR states 1591%.

Note 8 · From 2024 the Risk Profile describes underwriting risk as mitigated by 'its ARD arrangement with National Indemnity Company'; the Business and Performance section describes the ARD agreement as being with Aviva Insurance Limited (AIL), with reinsurance provided by NICo.

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2025

Delta from 2024

⭳ SFCR PDF

Cover ratio eases to 991% (2024: 997%); EOF GBP 69.0m all unrestricted Tier 1; the Part VII 2011 transfer history enters the Summary for the first time in the window; the 2024 SCR-methodology explanation is carried over verbatim.

2025 is a near-static year in which the Summary is carried over from 2024 almost verbatim. The stated cover ratio of “991% (2024: 997%)” [SFCR p.4]* matches the QRT within rounding [QRT], and the six-point fall is driven by a small SCR rise: the 2025 Summary states “£6,965 thousand (2024: £6,907 thousand)” where the 2024 SFCR itself stated GBP 6,908 thousand [Note 10], rather than by any own-funds movement. The item most needing scrutiny is the SCR explanation: the 2024 sentence that the AIL receivable “is now stressed in its entirety which explains the majority of the increase in the SCR” [SFCR p.4]* is repeated word for word, although this year's SCR increase was GBP 57k (less than 1%) [Note 9]; as written, the 2025 text describes a methodology change that the 2024 report already accounted for. The one genuinely new disclosure is historical: the Summary states the 2011 Part VII transfer of pre-2001 policies from other Aviva entities [SFCR p.3], which had not appeared in the Summary in any earlier year of this window.

Introduction (SFCR pp. 3)

Note: The Solvency UK framing paragraph introduced in 2024 is retained unchanged, the final PRA rules for Solvency UK “became effective from 31 December 2024” and “'Solvency UK' has been referred to in this document except for where referring to our Solvency II results” [SFCR p.3]* standard text.

Business & Performance (SFCR pp. 3)

New: The Company's run-off history is extended with the 2011 restructuring: “Under a Part VII transfer in 2011, policies from a number of other Aviva entities were transferred into the Company, all of which incepted prior to 2001.” [SFCR p.3]* This sentence appears in the Summary for the first time in the 2016-2025 window.

Changed: IFRS profit before tax of “£112 thousand (2024: profit £570 thousand)”, comprising an underwriting loss of GBP 159k, net investment income of GBP 271k and other activities of GBP nil [SFCR p.3]*.

Note: The NICo reinsurance and GBP 1bn AIL ARD boilerplate is unchanged standard text; “There have been no significant business or other events during the year” standard text [SFCR p.3].

System of Governance (SFCR pp. 3-4)

Note: The six governance bullets are unchanged from 2024, including the reference to governance “over the use of the standard formula” [SFCR p.4]* that has sat alongside the Capital Management section's Internal Model statement since 2020 [Note 4] standard text.

Risk Profile (SFCR pp. 4)

Note: Risk types remain “credit, liquidity and operational risks” with underwriting and market exposure described as immaterial standard text [SFCR p.4]; underwriting risk remains described as mitigated by “its ARD arrangement with National Indemnity Company” [SFCR p.4]*, the wording adopted in 2024 [Note 8].

Valuation (SFCR pp. 4)

Changed: Excess of assets over liabilities “£69,025 thousand (2024: £68,860 thousand)” on a Solvency II basis, “£547 thousand (2024: £600 thousand) lower than the value under IFRS” [SFCR p.4]*.

Capital Management (SFCR pp. 4)

Changed: EOF “£69,025 thousand (2024: £68,860 thousand)”, all unrestricted Tier 1 standard text; SCR “£6,965 thousand (2024: £6,907 thousand)”; MCR GBP 3,500k; surplus “£62,060 thousand”; regulatory cover ratio “991% (2024: 997%)” [SFCR p.4]*. [QRT verified: ratio 991%, matches]

Note: The diversification and SCR-methodology paragraph is carried over verbatim from 2024, including “Following a review of the Ocean Marine methodology, the AIL receivable is now stressed in its entirety which explains the majority of the increase in the SCR” [SFCR p.4]*, although the 2025 SCR increase was GBP 57k (less than 1%) [Note 9].

Headline metrics

SCR coverage (stated)991%2024: 997%

EOF / SCR / SurplusGBP 69.0m / 7.0m / 62.1m2024: 68.9m / 6.9m / 62.0m

MCRGBP 3.5m2024: GBP 3.5m

IFRS profit before taxGBP 112k2024: GBP 570k

New (1)

The 2011 Part VII transfer appears in the Summary for the first time in the window: policies from other Aviva entities, all incepted before 2001, were transferred into the Company.

Changed (2)

Cover ratio 991% (2024: 997%); EOF GBP 69,025k; SCR GBP 6,965k; surplus GBP 62,060k.

IFRS profit before tax GBP 112k (2024: GBP 570k), with net investment income of GBP 271k (2024: GBP 720k).

Notes this year (2)

Note 9 · The 2024 SCR-increase explanation ('the AIL receivable is now stressed in its entirety which explains the majority of the increase in the SCR') is repeated verbatim in 2025, when the year-on-year SCR increase was GBP 57k (less than 1%).

Note 10 · The 2025 Summary states the 2024 SCR comparator as GBP 6,907 thousand; the 2024 SFCR states GBP 6,908 thousand. The analogous 2024 case is recorded as Note 7.

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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.