Risk managers hold key to clarity on dividends

Absence of cash metric under Solvency II puts capital constraints in spotlight

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If absence truly makes the heart grow fonder, shareholders might come to think wistfully of a key metric under Solvency I that will be missing from insurance company reporting in Europe after January 1, 2016.

The metric in question, known as ‘free surplus', is used by investors to understand an insurer's ability to generate cash and therefore pay dividends. Because incoming Solvency II rules contain no similar measurement, analysts say investors will struggle to understand how much cash companie