SCR Ratio in Europe by country 2023

In the second quarter of 2023, the German insurance industry had Solvency Capital Requirement (SCR) ratio of three. It had the highest SCR ratio among all EU countries. In addition to the SCR ratio, insurers must also calculate minimum capital requirement (MCR). The MRC is essentially a tipping point in which, if an insurer falls below, the authorization of an insurer could be withdrawn.

Profitability of insurers

The combined ratio, which is the sum of claims and expenses incurred divided by premiums earned, is a measure of profitability used by insurance companies to see how efficiently they are running their business. The combined ratio can be displayed as a measure of 1 or as a percentage of 100. Insurance markets with a ratio of over 1 means that companies are paying out more in claims than they are receiving through premiums earned. The expense ratio is another measure of profitability and is calculated as the sum of expenses divided by premiums earned.

Solvency Capital Requirement (SCR) ratio of insurance markets in Europe in Q2 2023, by country

Characteristic	SCR ratio
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Release date

November 2023

More information

Region

Europe

Survey time period

Q2 2023

Supplementary notes

Release date is the date the database was accessed.

The source added the following information "Insurance undertakings are required by the Solvency II regulation to hold a certain amount of capital of sufficient quality in addition to the assets they hold to cover the contractual obligations towards policyholders. The amount of capital (called eligible own funds) required is defined by the Minimum Capital Requirement (MCR) and the Solvency Capital Requirement (SCR), which depend on the risks to which the undertaking is exposed. If the amount of eligible own funds falls below the MCR, the insurance license should be withdrawn if appropriate coverage cannot be re-established within a short period of time."

The weighted average represents the aggregate own funds available to meet the SCR divided by aggregate SCR.

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