As an insurance and banking Group, Unipol’s capital management strategy focuses on structurally sustaining financial returns in the medium and long term by means of policies that allow for the maintenance of an adequate level of solvency. In 2017 the Unipol Group reached a Solvency II ratio (standard formula with the use of USP - Undertaking Specific Parameters) of 1.52 (1.41 in 2016).
Furthermore, the Group calculated a solvency ratio for 2017 equal to 1.69 (1.61 in 2016) based on economic capital1, and adopted a Risk Appetite assessment based on an enterprise risk management approach that considers all current and projected risks to which it is exposed.
In quantitative terms, the Group’s Risk Appetite is determined on the basis of the following elements: capital at risk, capital adequacy and Liquidity/ALM ratios. Quality objectives are also defined in reference to compliance, strategic, emerging, reputational and operational risks. As part of its banking business, the Group recorded a ratio of loans to bank direct customer deposits of 65.85% (81.43% in 2016) and a Common Equity Tier 1 (CET1) ratio of 31.5%.
By means of prudent management again in 2017, the Unipol Group continued to diversify its investment asset allocation and maintain a stable level of liquidity sufficient to meet the operational requirements of the Group Companies.