Non-Life Fire Risk

Overview

This calculator implements Non-Life Fire Risk as the largest valid candidate concentration.^[1]

Input Terms

• Candidate Concentration: One valid fire concentration under the Article 132 concentration basis.^[1]
• Candidate Concentration SI: Sum insured for that concentration before any optional recognized recoverables entered on the fire risk basis.^[1]
• Fire Risk Recognized Reinsurance Recoverables: Reinsurance recoverables recognized for that candidate concentration under Article 132.^[1] The amount should relate to claims from the same building set and should not include protection that responds only to unrelated losses.
• Fire Risk Recognized SPV Recoverables: Special purpose vehicle recoverables recognized for that candidate concentration under Article 132.^[1] The amount should reflect SPV protection that would respond to the fire or explosion concentration being measured.

Technical Rationale

Article 132 focuses fire catastrophe risk on the largest valid concentration because a severe fire event is not treated as an ordinary portfolio-volume risk. The maximum-concentration basis preserves the single-location severity that drives the standard-formula calibration. Recognized recoverables reduce a candidate only when they satisfy the Article 132 response basis for that building set.

Candidate identification and geospatial validation remain part of the Article 132 evidence base.

Important Notes

• Gross vs. Net SCR: This calculator determines the standalone Non-Life Fire Risk SCR. Solvency II risk is only finalized as a net impact on Basic Own Funds after diversification in Non-Life Risk, 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.^[2]
• Reporting: The displayed result is intended to support the corresponding standard-formula component for the S.25.01.01 standard-formula reporting view.^[3]