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Non-Life Lapse Risk Grouping Simplification

Calculate the Simplified Discontinued Policies instantly.

%

Adverse Group Policies

1,750

×

Discontinuance Rate

40.0%

=

Simplified Discontinued Policies

700

Discontinuance Rate

40.0%

Non-Life Lapse Grouping Shock Impact

Shock charge
Retained value
ModuleShockPre-shockPost-shockCharge
Adverse Group Policies-40%1 7501 050700
1Step 1

Simplified Discontinued Policies

Simplified Discontinued Policies=Policies in Adverse Discontinuance Groups×Discontinuance Rate\textit{Simplified Discontinued Policies} = \textit{Policies in Adverse Discontinuance Groups} \times \textit{Discontinuance Rate}

Understand the Non-Life Lapse Risk Grouping Simplification

Overview

This calculator implements the grouped-policy simplification for Non-Life Lapse Risk within the Solvency II standard formula.[1] It identifies the simplified discontinued-policy count from grouped policy data; the resulting capital impact remains a valuation-model assessment.

Input Terms

  • Adverse Group Policy Count: Policies in the group for which discontinuance would increase technical provisions without the risk margin.[1]

Technical Rationale

Article 90a permits the Article 118(1)(a) identification of policies for which discontinuance would increase technical provisions without the risk margin to be performed on policy groups where the grouping conditions are met.[1] The policy-group approach is a proportionality measure: it reduces policy-level operational burden only where grouping does not hide material lapse sensitivity.

This page therefore produces the simplified discontinued-policy count and leaves the balance-sheet loss to the undertaking's valuation model. That boundary keeps the simplification from being mistaken for a full basic-own-funds stress.

Important Notes

  • Grouping condition: The grouped calculation depends on the Article 90a approach and should not be used where the group masks material policy-level lapse sensitivity.[1]
  • Model boundary: The output is a simplified count of discontinued policies for the Article 118(1)(a) event. The prepared non-life lapse capital requirement is still produced by the undertaking's valuation model.

Sources

  1. Delegated Regulation (EU) 2015/35 - Art. 90a (Simplified calculation for discontinuance of insurance policies in the non-life lapse risk sub-module) - EIOPA

Default values are illustrative sample inputs for navigation, training, and QA. Replace them with controlled data before using the result in capital analysis, governance, or reporting decisions.