The European Insurance and Occupational Pensions Authority (EIOPA) published today its annual Report on the use of capital add-ons during 2019.

This analysis included in the report is based on 2019 year-end data collected under Directive 2009/138/EC (Solvency II) as reported by the undertakings and insurance groups and complemented by a survey that entailed both qualitative and quantitative questions.

During 2019, nine NCAs have set capital add-ons to 19 solo undertakings, out of 2816 (re)insurance undertakings under the scope of the Solvency II Directive in the European Economic Area and the UK. These include nine non-life undertakings, five life undertakings, one composite undertaking and four reinsurance undertakings. The number of capital add-on was broadly in line with 2018 figures, when eight NCAs had set capital add-ons for a total of 21 solo undertakings including 10 non-life undertakings, eight life undertakings, two composites and one reinsurer.

The amount of capital add-ons imposed on undertakings using the standard formula remains very low overall in 2019, accounting for less than 0.5% of the total Solvency Capital Requirement (SCR). However, the amount of capital add-on is not insignificant when considering the amount at individual level. In sum, as of year-end 2019, the weight of the capital add-on over the total SCR for those undertakings using the standard formula with capital add-ons increased to 38% (32% in 2018).