The PRA’s Solvent Exit Planning (SEP) requirements have now moved from theory into practice. Following the 30 June 2026 deadline, insurers have now completed their first Solvent Exit Analysis (SEA), assessing and demonstrating how they would achieve an orderly exit from the market while remaining solvent. As firms move from initial compliance to ongoing maintenance and enhancement, understanding emerging best practice, common challenges and regulatory expectations has become increasingly important. Drawing on our experience of reviewing SEAs, we highlight the areas firms have approached well and where further development may be needed.
When the requirements were first introduced, much of the industry discussion understandably focused on regulatory expectations and compliance. However, having now seen several SEAs, a clearer picture is emerging of what firms have done well, the common challenges faced, and how firms are likely to evolve their SEAs in future iterations.
Solvent Exit Planning best practice: What’s working well
Stakeholder engagement and cross-functional involvement in Solvent Exit Planning
Perhaps the most encouraging observation is the level of stakeholder engagement we have seen across firms. The strongest SEAs were not developed solely by Risk, Finance or Actuarial teams. Instead, they involved broad input from Legal, Compliance, Operations and senior management, ensuring the SEA was considered from both strategic and operational perspectives.
Building a robust Solvent Exit Analysis framework and structure
Many firms adopted a clear and logical structure for their SEA, closely aligned to the PRA’s requirements. This made it easier to demonstrate compliance while ensuring that key elements such as exit triggers, barriers, resources, governance arrangements and communication plans were appropriately addressed.
Leveraging existing documentation
Another positive theme was the extent to which firms leveraged existing frameworks and documentation. Rather than creating standalone exercises, many organisations built on existing ORSAs, recovery plans, operational resilience assessments and risk management frameworks. This helped create consistency across regulatory processes, avoid duplication of effort and embed SEA monitoring into BAU risk reporting.
Solvent exit option considerations
We saw good consideration of potential exit routes. Firms generally demonstrated a strong understanding of the options available to them, whether through run-off, Part VII transfer, sale, merger or a combination of approaches. In many cases, firms carefully considered how different products, distribution models and customer groups could require different exit strategies.
Governance arrangements
Most firms established clear Board oversight, defined ownership of the SEA and appropriate review and challenge mechanisms. Training to Board members was also provided in some instances. Several firms have begun considering how their SEA will be refreshed and maintained over time, rather than treating it as a one-off compliance exercise.
Common Solvent Exit Planning challenges for insurers
Whilst the quality of SEAs was generally positive, a recurring challenge was ensuring that the depth of underlying analysis was reflected within the SEA itself. In several cases, significant work had been performed behind the scenes, but the supporting rationale, assumptions and conclusions were not always sufficiently evidenced within the SEA. As a result, the SEA did not always fully demonstrate the extent of challenge and consideration undertaken.
Financial and non-financial resources
Whilst firms could often identify the activities required to execute a solvent exit, there was frequently less clarity around the resources needed to deliver them. Areas such as staff retention, external advisers, outsourced providers, technology dependencies, legal costs and contract termination costs were not always fully quantified or incorporated into the SEA.
Trigger frameworks
Triggers were another area where firms continue to develop their thinking. While most firms had identified indicators that could lead to a solvent exit, questions often remained around the calibration of thresholds, governance responses and the point at which a Solvent Exit Execution Plan (SEEP) would need to be prepared. Defining when a solvent exit becomes a “reasonable prospect” remains a complex judgement for many firms.
Developing realistic solvent exit timelines
We observed that exit timelines were sometimes optimistic. Some did not fully account for regulatory approvals, intra-group or third-party dependencies, operational complexities, contractual obligations, policyholder communications and potential delays that may arise under stressed conditions.
Reverse stress testing (RST) within Solvent Exit Planning
Finally, reverse stress testing and severe-but-plausible scenarios continue to present challenges. Many firms naturally approached SEP from a strategic perspective, but the PRA’s expectations require organisations to consider how they would respond during periods of significant stress. Demonstrating the impact of these scenarios on solvency, liquidity, resources and execution timelines remains an area for further development.
How our Solvent Exit Planning specialists can help
As with any new regulatory requirement, firms have invested significant effort in understanding the requirements under SS11/24 and in developing their initial SEA. Firms continue to develop their thinking and approach to solvent exit planning. As experience matures and industry best practice becomes clearer, future iterations of SEAs are likely to focus on strengthening trigger frameworks, refining stress testing, improving resource assessments and demonstrating greater operational realism.
As firms move from initial compliance towards ongoing maintenance of their SEAs, independent review and challenge can provide valuable assurance over both compliance with PRA expectations and the practical operability of the proposed approach, helping firms identify gaps before future updates or regulatory scrutiny.
At PKF, we have supported firms through independent SEA reviews, helping to assess compliance, challenge assumptions and identify opportunities for enhancement. Whether you have already completed your first SEA or are preparing for future updates, an independent review can provide the Board and management with confidence that their solvent exit planning remains robust, credible and fit for purpose.
