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NHBC Solvency and Financial
Condition Report 2019
Contents
Executive summary............................................................................................................... 4
Directors' responsibility statement......................................................................................... 7
Independent auditor's opinion ............................................................................................... 8
A. Business and Performance ............................................................................................. 11
A.1 Business ................................................................................................................... 11
A.2 Underwriting performance ......................................................................................... 13
A.3 Investment Performance ....................................
NHBC Solvency and Financial Condition Report 2019
Contents Executive summary.......................
E.3 Use of the duration-based equity risk sub-
Executive summary This is the Solvency and Financ
System of governance NHBC's Board recognises the
Valuation for solvency purposes Solvency II requi
Directors' responsibility statement We acknowledg
Independent auditor's opinion Report of the ex
reporting provisions of the PRA Rules and
assurance, but it is not a guarantee that an audi
A. Business and Performance This section of the r
NHBC's activities NHBC's activities consist of tw
Road & Sewer Bonds NHBC offers a service to act a
premiums and road and sewer bond product income.
Credit & suretyship NHBC has been successful in g
Total operating expenditure fell by 2.5% (2018:
B. System of Governance This section sets out inf
Board committees The Board has various committees
changes, review and approve investment manager gu
· due regard to all relevant regulatory guid
B.2 Fit and proper requirements NHBC carries out
Entities outside the scope of the Risk Management
The following table provides a brief description
the model to remediate issues and limitations ide
First line: Business units and operations Operati
· Co-ordination with other control and mon
insurance side has become much more sophisticated
C. Risk Profile Overview NHBC's risk profile is a
mandates. Listed equity futures and options are a
C.1 Underwriting risk Underwriting risk refers to
and all derivative exposures are held for risk re
The nature of the insurance business underwritten
Longevity risk refers to the risk of losses arisi
D. Valuation for Solvency Purposes This section
Following the hierarchy of valuation methods in a
Other assets NHBC has operating leases for one pr
Receivables (trade, not 3.9 -
The Solvency II Technical Provisions are calculat
The reinsurance recoveries are estimated stochast
· Investment Management Expenses are thos
The UK GAAP margin is selected by Management and
Material classes of liability Technical provision
As such there are no differences between measurem
D.5 Other information The information presented i
E. Capital Management This section of the report
Table below presents how funds are allocated to s
The £33.5m increase in own funds is driven by the
The MCR is based on applying the appropriate fact
F. Quantitative reporting templates The following
S.02.01.02 Balance sheet Solvency II value Assets
S.02.01.02 Balance sheet Solvency II value Liabil
S.05.01.02 Premiums, claims and expenses by line
S.05.02.01 Premiums, claims and expenses by count
S.17.01.02 Non-Life Technical Provisions Dire
S.19.01.21 Non-Life insurance claims Total Non-l
S.23.01.01 Own Funds Basic own funds before de
S.25.01.21 Solvency Capital Requirement - for und
S.28.01.01 Minimum Capital Requirement - Only lif