With profits losses quantified - paper 14 May, 2003

WITH PROFITS FUNDS in the UK suffered a one-third fall in the value of their solvency margins last year, according to a new study from Nottingham University Centre for Risk and Insurance Studies, the FT writes. The average free asset ratio among the 20 biggest life insurers fell from 9.9% to 6.6% - however, the fall since 1999 is even greater: then average FARs stood at 22.5%. The study also warns that current FARs are calculated with what the FSA has deemed to be £11bn in "financial engineering", the FT adds, which although it can provide some stability is another risk factor...