Insurers which BaFin wrote to last year about identified deficiencies (see BaFin Journal August 2017, only available in German) have largely satisfactorily remedied these in their 2017 report. The quality of some undertakings' reports has even improved significantly.

However, the second SCFRs also showed that the required quality level has still not been reached. BaFin therefore expects undertakings to further optimise their reports.

Comprehensibility and completeness

The comprehensibility for the average policyholder has improved slightly in some cases. Last year, almost all undertakings had already made reasonable efforts to present the required information in a way that could be understood by laypersons.

In terms of completeness, at least some progress has been made in meeting the requirements of the Solvency II Delegate Regulation. These have been specified in guidelines issued by the European insurance supervisory authority EIOPA and in guidance notes released by BaFin, which, however, are not always observed. As a result, insurers neglected certain aspects that they should have covered, and information is less concrete and detailed than required.

BaFin also noted at least positive trends in the depth of detail of the information provided. Last year, the SCFRs contained mostly general information, and the lack of undertaking-specific data, especially on the governance system, was a major point of criticism from the supervisory authorities. Despite some progress, this deficiency persists.

Summary

Last year, BaFin also identified many shortcomings in the summary of the SFCR. The 2017 SFCRs showed significantly fewer cases of such shortcomings.
The summary is to cover each of the five areas on which information must be disclosed in the SFCR: business and performance, governance system, risk profile, valuation for solvency purposes and capital management. For each of these areas, the main information is to be summarised. In addition, the material changes that have occurred during the reporting period must be disclosed.

References and additional information

As was the case last year, references to external documents play only a minor role in the SCFR, which is a positive point.

On the other hand, a major point of criticism continues to be that some insurers are replacing the information to be provided in the text section with references to the figures in the appendix.

Information that is not explicitly required must also be disclosed if it is likely to influence the judgement or decisions of SFCR users. However, there has been little change in the reluctance of undertakings to disclose such additional information.

Comparison with the previous year

In their 2017 SCFR, undertakings had to make comparisons with the previous year for the first time. It is positive that most undertakings not only drew these comparisons quantitatively, but also addressed the differences to the previous year qualitatively.