Solvency II - Lloyd's

2.9 QMC245: Non-life insurance claims information - Gross reported but not settled
(RBNS)
Purpose of form: This form reports, for each line of business and material currency, development triangles for
claims reported but not settled (RBNS) claims.
This form is required for all reporting years combined and will be required on an annual basis. A split of gross
amount, salvage & subrogation and recoverable from reinsurance should be provided.
RBNS: These are provisions in respect of claim events that have happened and been reported to the insurer,
but have not yet been settled, excluding IBNR (incurred but not reported claims). These may be case-bycase
reserves estimated by claim handlers and do not need to be on a best estimate Solvency II basis.
The default length of run-off triangle is 15+1 years for all lines of business (i.e. the 15 most recent pure years
reported separately and all the earlier pure years reported in aggregate) but where a syndicate has existed
for less than 15 years, it should report triangles for that period it has been in existence. The information will
either be required on accident year or underwriting year but EIOPA is yet to decide on the basis. Historical
data, starting from the first time application of Solvency II (i.e. 1 January 2014), is required. Hence, the first
pure year required to be reported separately will be 2000.
In the case of RITC (both inwards and outwards), the ceding syndicate should restate the historical data
submitted in the first reporting date after RITC to reflect the reported but not settled (RBNS) claims amount
transferred out as a result of the RITC while the accepting syndicate should allocate the RBNS claims
amount to the respective underwriting/accident year.
This form should be reported for each Solvency II line of business, but direct and accepted proportional
reinsurance should be reported together.
Currency: There is a materiality threshold applicable in determining the number of currencies required to be
reported. However, this materiality applies at the Lloyd’s level and hence the following ‘six plus one’
currencies have been determined; USD, GBP, EUR, CAD, AUD, JPY and OTHER. Reporting is required
based on the original currencies but converted to GBP using the year end closing rate.
2.10 QMC246: Non-life insurance claims information – Inflation rates
Purpose of form: This form reports additional information on inflation rates where a syndicate has used
methods that take into account inflation to adjust data.
This form is required for all reporting years combined and will be required on an annual basis.
Additional information- Inflation rates: Where a syndicate has used run-off techniques that explicitly take
into account inflation in order to adjust data, it should disclose:
� historic inflation rate used to adjusted historical paid losses triangles
� future (expected) inflation rate used to increase the projected paid losses
For both historic/expected inflation rate, if used, the syndicate should indicate separately the estimate of:
� external inflation, which is the “economic” or “general” inflation, i.e. the increase of the price of goods
and services in an specific economy (e.g. Consumer Price Index, Producer Price Index, etc.) and
� endogenous inflation, which is an increase of claim costs specific of the line of business under
consideration.
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