Solvency risk

What is Solvency risk?

Solvency risk meaning Risk that an investor’s assets will be insufficient to meet its liabilities in the future. Used in the case of UK defined benefit pension plans, where liabilities are calculated as the costs of securing annuities with an insurer in the event of a plan wind-up. In the case of insurance companies, usually by reference to the statutory solvency tests.

 

reference: mercer.com