The Financial Supervisory Authority of Norway (Finanstilsynet) has published a supervisory report following its April 2024 onsite inspection of Watercircles Forsikring ASA, covering insurance technical provisions, risk exposure and capitalisation, and the firm’s governance and control framework as a follow-up to a 2021 inspection. The report raises concerns about the firm’s financial vulnerability and the realism of its profitability and capital forecasts, and identifies governance and technical provisioning practices that the supervisor expects to be strengthened. Watercircles has been subject to extraordinary financial reporting due to a strained financial position, and Finanstilsynet notes that revised forecasts have reduced expected results, pushed out the timeline for self-financing, and required capital raising to cover operating losses. Finanstilsynet continues to view the firm’s profitability programme and projections as overly optimistic and asked for board-level assessments of growth capacity, profitability challenges, and sensitivity and risk analyses. On governance, the supervisor highlights a lack of clarity in recent years around strategy, including Sweden-related plans, and notes the firm has now put earlier ambitions to obtain a Swedish licence on hold after a licence application was rejected; the report also records that Accept Försäkringsaktiebolag (publ) has been authorised to acquire 100 percent of the votes or capital in Watercircles Forsikring ASA. Finanstilsynet further questions whether the chief executive’s simultaneous role as chief executive of another entity is compatible with the time commitment required at Watercircles, and expects more robust approaches to technical provisions, including considering longer data histories for frequency claims and revisiting all parameters at least annually, criticising the fact that certain parameters were last calibrated in 2020. Finanstilsynet requested a copy of the board meeting minutes where the inspection report is considered and asked that a copy of the report be sent to the firm’s appointed auditor.
Norwegian Finanstilsynet 2025-05-26
Financial Supervisory Authority of Norway publishes inspection report highlighting capital and governance shortcomings at Watercircles Forsikring
The Financial Supervisory Authority of Norway (Finanstilsynet) published a report on Watercircles Forsikring ASA, highlighting concerns over financial vulnerability, governance, and technical provisioning. It criticizes the firm's optimistic profitability forecasts and governance clarity, noting a rejected Swedish licence application and questioning the CEO's dual role. Finanstilsynet expects strengthened governance and technical provisions, including annual parameter reviews.