Health Accident Concentration Risk

Overview

This calculator implements the gross capital requirement for the Health Accident Concentration Risk sub-module within the Solvency II standard formula.^[1] The Health Accident Concentration Risk requirement is defined as the economic capital necessary to cover the loss in basic own funds resulting from a 1-in-200 year stress event affecting a large concentration of insured persons in the same location (e.g., a single building).^[2]

Input Terms

• Event Severity: The prescribed capital amount for each type of health-related accident injury (e.g., death, permanent disability, or short-term disability).^[1]
• Concentrated Persons: The total count of persons insured under the health-accident obligations who are working or living in the same location.

Technical Rationale

The Health Accident Concentration Risk sub-module is calibrated to a 99.5% confidence level over a one-year horizon. Unlike the general mass-accident risk, accident-concentration risk focuses on a specific localized catastrophic event where a significant number of insured persons are injured in a single building or high-risk venue.^[1]

The calculation uses a scenario-based approach, summing the prescribed capital charges for each injured person based on the severity of the expected claims at the specific location of concentration. This method ensures that the undertaking holds enough capital to absorb the localized surge in claims follow a catastrophic building-level accident (e.g., fire, collapse, or other human-driven catastrophe). The final result represents the gross health catastrophe component before diversification in Health Risk.

Important Notes

• Accident Diversification: The diversification between different types of injuries (death vs. disability) is already recognized within the prescribed regulatory weights at this sub-module layer.
• Gross vs. Net SCR: This calculator determines the standalone Health Accident Concentration Risk SCR. Solvency II risk is only finalized as a net impact on Basic Own Funds after diversification in the higher Health Risk aggregation chain, then within BSCR, and after the top-level LAC TP and LAC DT adjustments.
• Regulatory deviation: Material deviation from standard-formula assumptions at this layer may support a capital add-on or a move toward an internal model where justified.^[3]
• Reporting: The displayed result is intended to support the corresponding standard-formula component feeding the S.25.01.01 standard-formula reporting view.^[4]