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Non-Life Non-Proportional Property Risk

Calculate the Non-Proportional Property Risk Capital Requirement instantly.

€

Premiums

€1 400 000

×

Shock Factor

2.5

=

Final SCR

€3 500 000

1Step 1

Blend diversification with the fixed half-weight

Adj=0.5×DIVnpproperty+0.5Adj=0.5\times DIV_{npproperty}+0.5
2Step 2

Apply the fixed non-proportional property factor

Factor=2.5×AdjFactor=2.5\times Adj
3Step 3

Apply the effective factor to next-year premiums

SCRnpproperty=Factor×PnppropertySCR_{npproperty}=Factor\times P_{npproperty}

Understand the Non-Life Non-Proportional Property Risk

Overview

This calculator implements the Article 127 Non-Proportional Property Catastrophe Risk formula for non-proportional property reinsurance obligations.[1]

Input Terms

  • Gross Premiums to be Earned Next 12 Months: Gross premiums for the relevant line of business 28 non-proportional property reinsurance obligations.[1]
  • DIV Non-Proportional Property: The Article 127 geographical diversification factor, calculated under Annex III on the relevant premium basis.[1]
  • Article 127 Formula Factor: Fixed at 2.5.[1]

Technical Rationale

Article 127 treats non-proportional property catastrophe reinsurance as a premium-volume and territorial-concentration problem rather than a named physical scenario.[1] That structure reflects the nature of excess-of-loss covers: the undertaking's loss sensitivity is driven by the ceded catastrophe layer, earned premium scale, and geographical spread of the underlying property book.

This calculation is therefore a direct Article 127 formula path, not a prepared scenario selector. The diversification factor is retained as an explicit input because it is the regulatory mechanism that distinguishes broad geographical participation from a concentrated book.

Important Notes

  • Gross basis: Premiums are entered gross, without deduction for reinsurance premiums.
  • DIV input: The page accepts the prepared Annex III diversification factor. The legal Article 127 formula is calculated here, while Annex III segmentation remains a separate support calculation.
  • Gross vs. Net SCR: This calculator determines the standalone Non-Life Non-Proportional Property 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]

Sources

  1. Delegated Regulation (EU) 2015/35 - Art. 127 (Sub-module for catastrophe risk of non-proportional property reinsurance) - EIOPA
  2. Directive 2009/138/EC - Art. 37 (Capital add-on) - EIOPA
  3. Commission Implementing Regulation (EU) 2023/894 - QRT S.25.01.01 (SCR standard formula) - EUR-Lex

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.