7.4. Capitalisation

On the basis of the current regulatory requirements, available own funds and the risk capital requirement until the end of 2015 are calculated in accordance with Solvency I.

As Solvency II comes into force on 1 January 2016, the definitions and methods used to calculate available own funds as well as capital requirements and management standards are being replaced by Solvency II standards.

As at 31 December 2015, the solvency ratio on the basis of the regulatory provisions according to Solvency I was 301,7 per cent. Eligible equity amounted to € 3,551.5 million; this included eligible subordinated liabilities of € 250.0 million which constituted up to half of the equity requirement, and eligible subordinated liabilities in the amount of € 290.9 million constituting up to a quarter of the equity requirement. The solvency requirement is € 1,163.8 million.

7.4.1 Statutory requirements

Risk capital requirements and available equity are currently calculated according to Solvency I regulations. These will be replaced when the Solvency II provisions take effect. In order to guarantee a smooth transition between these two different calculation methods, UNIQA has completed parallel calculations since 2008. One consequence of these efforts was an early Group-wide introduction of the new methods and processes. Gaps and shortcomings will thus be identified early and promptly rectified.

7.4.2 Internal capital adequacy

UNIQA defines its risk appetite on the basis of an economic capital model (ECM). The cover for quantifiable risks with eligible own funds (capital ratio) should lie between 170 and 190 per cent in 2016.

As at 31 December 2014, the solvency ratio in accordance with the ECM was 150 per cent. Details for the reporting date of 31 December 2015, including a detailed analysis of changes, can be found in the ECM report.

7.4.3 Standard and Poor’s model

In addition to regulatory and internal provisions, the Group also takes into account the capital requirements specified by an external rating agency to ensure that the Group’s credit quality is presented objectively and can be compared with other entities. Therefore, UNIQA is regularly rated by the rating agency Standard & Poor’s, which gives UNIQA Insurance Group AG a rating of “A–”. UNIQA Österreich Versicherungen AG and UNIQA Re AG each have a rating of “A”; UNIQA Versicherung AG in Liechtenstein is rated with “A–”. The supplementary capital bonds issued in 2013 (€ 350.0 million Tier 2, first call date 31 July 2023) and 2015 (€ 500.0 million Tier 2, first call date 27 July 2026) are rated “BBB” by Standard & Poor’s. There are also further bonds with no rating (€ 250.0 million restricted Tier 1, first call date 31 December 2016). Standard & Poor’s rates the outlook for all the companies as stable. UNIQA includes the impact on its rating in its capital planning process, with the objective of improving the rating over the long term as the corporate strategy is implemented.

© UNIQA Group 2016