What drives risk disclosure by German insurers: Our recent publication in The Journal of Risk Finance

In their paper recently published in The Journal of Risk Finance, Felix Schwartze and Michael Dobler investigate the determinants of German insurers’ disclosure on risks and their management. Unlike prior empirical studies in the insurance industry, the paper analyses risk disclosure in the Solvency and Financial Condition Reports (SFCRs) and predominantly of non-listed insurers. Key findings suggest that socio-political theories can explain the volume of risk disclosure and highlight the importance of disclosure incentives even in a highly regulated environment.

The paper is available as an open access publication:

Schwartze, F. & Dobler, M. (2026). Determinants of narrative risk disclosure in the insurance sector: evidence from German Solvency and Financial Condition Reports. The Journal of Risk Finance, 27(1), 85–107. https://doi.org/10.1108/JRF-04-2024-0106

Abstract:

Purpose – This study aims to provide initial evidence on the determinants of insurers’ narrative risk disclosure in Solvency and Financial Condition Reports (SFCRs) as a new reporting instrument under Solvency II. 
Design/methodology/approach – We investigate the volume of risk disclosure collected from 1,510 solo SFCRs by 302 unique German (non-listed and listed) insurers over the reporting periods 2016–2020. Based on socio-political theories, we hypothesise that risk disclosure volume is positively associated with insurer size and status as a life insurer and negatively associated with the insurer’s solvency ratio and legal form as an insurer governed by public law. 
Findings – Our results support our hypotheses and suggest that socio-political theories explain the variations in risk disclosure volume in SFCRs. The key results remain unaltered when focusing on the disclosure of insurers’ risk profiles and hold for various robustness tests. Additionally, our study provides novel insights into how narrative risk disclosure relates to disclosure regulations and insurers’ institutional characteristics. 
Social implications – Our findings imply that public (social and political) pressure on insurers drives their narrative risk disclosure to the broad public. 
Originality/value – To the best of our knowledge, this study is the first to explore the determinants of risk disclosure in SFCRs. By doing so, it enriches the limited research on risk disclosure in the insurance sector and overcomes the shortcomings of prior studies that focus on group-level evidence from the financial reports of listed insurers.