Capital risk

12 Months Ended

Dec. 31, 2025

Capital risk [Abstract]

Capital risk

The Group maintains capital levels across all regulated entities

commensurate with a prudent level of solvency to achieve

financial resilience and market confidence. To support this,

capital risk appetite is calibrated by taking into consideration

both an internal view of the amount of capital to hold as well as

external regulatory requirements.

The Group assesses both its regulatory capital requirements and

the quantity and quality of capital resources it holds to meet

those requirements in accordance with the relevant provisions of

the Capital Requirements Directive (CRD V) and Capital

Requirements Regulation (UK CRR). This is supplemented

through additional regulation set out under the PRA Rulebook

and through associated statements of policy, supervisory

statements and other regulatory guidance.

The Solvency II regime for insurers and insurance groups came

into force from 1 January 2016 and was subsequently amended as

part of the Solvency UK reforms. Insurance is required to

calculate solvency capital requirements and available capital on

a risk-based approach. Insurance calculates regulatory capital on

the basis of an internal model, which has been approved by the

PRA.

The minimum required capital must be maintained at all times

throughout the year. These capital requirements and the capital

available to meet them are regularly estimated in order to ensure

that capital requirements are being met. The capital position of

the Group’s insurance businesses is reviewed on a regular basis by

the Insurance, Pensions and Investments Executive Committee.