Solvency Index

A solvency index is the central pillar of a commercial report and other information formats for evaluating a business’s solvency. Its accurate forecasts of the probability of default (PD) provide for quick and direct assessment of a customer’s solvency – and consequently also the customer’s credit worthiness.

The solvency index calculation techniques vary and are continually evolving, employing proven mathematical and statistical analysis methods. These advances not only take structural changes in the economic structure, but also factors such as changing PDs in the individual market segments, into account.

The solvency index’s forecasting accuracy is also attributed to an extensive database. At a leading German credit bureau, it has increased significantly over the past few years – not only in terms of 10 million accounts now published, but also regarding industry key performance indicators and in the payment-experience field. The debtors’ register of this credit bureau alone, for example, gives access to over 100 million payment experiences in Germany.