Non-Life Fire Risk

Overview

This calculator implements the gross capital requirement for the Fire Catastrophe Risk sub-module within the Solvency II Non-Life Underwriting standard formula.^[1] The Fire Risk requirement is defined as the economic capital necessary to cover the loss in basic own funds resulting from an extreme, low-frequency 1-in-200 year building-fire catastrophe.^[2]

Input Terms

• Sum Insured (Largest Building): The total value of property exposure for the undertaking's largest building (or building complex within a 200m radius).^[1]
• Scenario Severity: The requirement is equivalent to the loss in NAV resulting from a total loss of the largest building exposure.

Technical Rationale

The Fire Catastrophe Risk sub-module is calibrated to a 99.5% confidence level over a one-year horizon. Unlike natural hazards, fire catastrophe risk focuses on a single extreme-exposure event: the destruction of the largest building in the undertaking's portfolio.^[1]

The calculation identifies the largest single-building exposure (concentrated within a 200m radius) and assumes its total destruction. This ensures that the undertaking holds enough capital to absorb the maximum possible loss from a single localized fire. The final result represents the gross fire catastrophe component before diversification in Man-made Catastrophe Risk.

Important Notes

• Scenario evidence gate: Prepared catastrophe scenario amounts must carry source evidence for both scenario inputs. The selected maximum remains visible, while the governance-breach output flags unsupported scenario preparation.
• Concentration radius: A "single building" includes all structures within a 200-meter radius across all property lines of business. Accurate geographical mapping of property risks is critical for correct sub-module calibration.
• 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.^[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]