XBRL, or eXtensible Business Reporting Language, is a global standard for exchanging and presenting business and financial information in a digital, structured, and machine-readable format. It was developed to improve how financial data is collected, shared, and analyzed by allowing reports to be understood by software systems without manual re-entry or interpretation.
Instead of traditional documents like PDFs or spreadsheets, XBRL uses tags to identify individual data elements such as revenue, capital, or liabilities. These tags follow a standard taxonomy, which defines the structure and meaning of the data being reported. As a result, XBRL enables automatic validation, comparison, and analysis of complex financial information across organisations and systems.
XBRL is widely used by regulators, companies, auditors, and analysts to streamline financial reporting, reduce errors, and improve transparency. It has been adopted in many regulatory frameworks around the world, including banking, taxation, and insurance. In the insurance sector, it is the required format for reporting under the Solvency II regime in the EU.
By turning static financial reports into structured digital data, XBRL supports better decision-making, improves regulatory oversight, and reduces the reporting burden over time through automation and consistency.
Use in Solvency II
The use of XBRL in Solvency II plays a central role in how insurers report their regulatory data to supervisors. XBRL, which stands for eXtensible Business Reporting Language, is a structured digital format designed to make the exchange of financial and risk-related information more efficient, consistent, and machine-readable. Under Solvency II, it is the mandatory format for submitting key reports to national and EU regulators.
Solvency II requires insurers to provide detailed and frequent information about their financial position, capital requirements, risk exposures, and governance. This information is captured through a set of standard templates known as Quantitative Reporting Templates (QRTs), along with narrative reports such as the Solvency and Financial Condition Report (SFCR) and the Regular Supervisory Report (RSR). The volume and complexity of this data mean that manual or unstructured reporting formats are not suitable. XBRL solves this challenge by providing a digital structure that allows the information to be validated, processed, and compared automatically.
The foundation of XBRL reporting in Solvency II is the EIOPA taxonomy. This taxonomy defines the data structure, format, and validation rules for each reporting period. It acts as a blueprint that insurers must follow when preparing their reports. Each taxonomy version reflects the latest regulatory requirements and technical updates, and insurers are expected to keep up to date with these changes to remain compliant.
Using XBRL enables consistent interpretation of data across all firms and regulators. Since all reports follow the same digital structure, regulators can efficiently aggregate information from across the insurance sector, run validation checks, and spot inconsistencies. This supports more proactive supervision, better risk oversight, and improved transparency at both the national and European levels.
For insurers, the use of Solvency II XBRL introduces a need for technical capability and process maturity. Firms must extract data from internal systems, map it to the taxonomy, perform validations, and generate XBRL files for submission. Many rely on specialised software solutions or third-party service providers to support this process. Data quality and internal controls become critical, as errors in XBRL files can lead to rejections or regulatory scrutiny.
In summary, the use of XBRL in Solvency II transforms regulatory reporting from a manual task into a structured digital process. It allows large volumes of complex data to be exchanged reliably and efficiently, supports better supervision, and enables greater harmonisation across the insurance industry.