Non-Life Motor Vehicle Liability Risk

Overview

This calculator implements the gross capital requirement for the Motor Vehicle Liability Catastrophe Risk sub-module within the Solvency II Non-Life Underwriting standard formula.^[1] The Motor Vehicle Liability 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 motor-accident catastrophe.^[2]

Input Terms

• Number of Insured Vehicles: The total count of vehicles insured under the motor vehicle liability obligations.^[1]
• Specified Accident Factor: The regulatory factor (e.g., EUR 50,000 per person) representing the 1-in-200 year motor-accident severity.
• Scenario Severity: The requirement is equivalent to the loss in NAV resulting from a catastrophic multi-person accident scenario.^[1]

Technical Rationale

The Motor Vehicle Liability Catastrophe Risk sub-module is calibrated to a 99.5% confidence level over a one-year horizon. It captures the sensitivity of the undertaking’s basic own funds to a large-scale motor accident involving multiple injured parties, such as a major pile-up in a tunnel or a catastrophic bus accident.^[1]

The calculation uses a scenario-based approach, multiplying the number of potentially affected persons in the largest expected concentration by the prescribed severity per person. This ensure that the undertaking holds enough capital to absorb the surge in liability claims following a single mass-accident event. The final result represents the gross motor 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.
• Mass-Accident Bound: For many motor portfolios, this catastrophe requirement is a significant driver because it assumes a very high number of injured parties in a single event.
• Gross vs. Net SCR: This calculator determines the standalone Non-Life Motor Vehicle Liability 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]