solvency margin

7.4

The extra money an insurance company keeps to show it can pay claims and debts

noun
/ˈsɒlvənsi ˈmɑrdʒɪn/

Formal

: margen de solvencia

The insurer maintained a strong solvency margin throughout the fiscal year.

Examples

Regulators require companies to report their solvency margin annually.
A low solvency margin can jeopardize an insurance firm's operating license.
The company's solvency margin is above the required level.
Many insurers aim for a high solvency margin to ensure stability.
The insurer maintained a strong solvency margin throughout the fiscal year.
Regulators require companies to report their solvency margin annually.
A low solvency margin can jeopardize an insurance firm's operating license.

Synonyms

margin of safety

vssolvency margin

Specialized

1 4.5

An extra amount beyond the minimum to keep something safe

is a regulated financial excess showing assets over liabilities for insurer stability

safety margin

vssolvency margin

1 3.7

An extra amount people keep to allow for errors and prevent harm

is a formal rule based measure of an insurer's asset surplus over liabilities

How Large

solvency margin

Formal

7.4

deficit

674 4.3

Surface Forms

solvency margin singular

solvency margins plural

Morphology

solvency + margin

The parts 'solvency' (ability to pay debts) and 'margin' (a difference or buffer) yield a clear general sense that this is the buffer by which assets exceed liabilities. However, the precise regulatory/calculative meaning and technical implications are specialized and not fully predictable to a B1 learner, so the expression is only partially transparent.

Etymology

Solvency margin paints a simple picture: solvency means being 'able to pay debts' and margin is an extra safety line or cushion. Imagine a money cushion between what a company owns and what it owes; that's why the term refers to the extra funds that show a company's 'financial stability'.