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Operational Risk Volume Measure

Calculate the Premium_Charge and Provision_Charge instantly.

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Premium_Charge

€1 240 000

Provision_Charge

€1 830 000

Net Life Premiums

€22 000 000

Net Life TP

€240 000 000

Life Premium Leg

€880 000

Non-Life Premium Leg

€360 000

Life Growth Add-On

€0

Non-Life Growth Add-On

€0

Life Provision Leg

€1 080 000

Non-Life Provision Leg

€750 000

1Step 1

Net Life Premiums

Net Life Premiums=max⁡(0,Earned Premiums (Life, Last 12 Months)−Earned Premiums (Life UL, Last 12 Months))\textit{Net Life Premiums} = \max(0, \textit{Earned Premiums (Life, Last 12 Months)} - \textit{Earned Premiums (Life UL, Last 12 Months)})
2Step 2

Prior Net Life Premiums

Prior Net Life Premiums=max⁡(0,Earned Premiums (Life, Prior 12 Months)−Earned Premiums (Life UL, Prior 12 Months))\textit{Prior Net Life Premiums} = \max(0, \textit{Earned Premiums (Life, Prior 12 Months)} - \textit{Earned Premiums (Life UL, Prior 12 Months)})
3Step 3

Net Life TP

Net Life TP=max⁡(0,TP (Life)−TP (Life UL))\textit{Net Life TP} = \max(0, \textit{TP (Life)} - \textit{TP (Life UL)})
4Step 4

Life Premium Leg

Life Premium Leg=Net Life Premiums×0.04\textit{Life Premium Leg} = \textit{Net Life Premiums} \times 0.04
5Step 5

Non-Life Premium Leg

Non-Life Premium Leg=max⁡(0,Earned Premiums (Non-Life, Last 12 Months))×0.03\textit{Non-Life Premium Leg} = \max(0, \textit{Earned Premiums (Non-Life, Last 12 Months)}) \times 0.03
6Step 6

Life Growth Add-On

Life Growth Add-On=max⁡(0,Net Life Premiums−Prior Net Life Premiums×1.2×0.04)\textit{Life Growth Add-On} = \max(0, \textit{Net Life Premiums} - \textit{Prior Net Life Premiums} \times 1.2 \times 0.04)
7Step 7

Non-Life Growth Add-On

Non-Life Growth Add-On=max⁡(0,max⁡(0,Earned Premiums (Non-Life, Last 12 Months))−max⁡(0,Earned Premiums (Non-Life, Prior 12 Months))×1.2×0.03)\textit{Non-Life Growth Add-On} = \max(0, \max(0, \textit{Earned Premiums (Non-Life, Last 12 Months)}) - \max(0, \textit{Earned Premiums (Non-Life, Prior 12 Months)}) \times 1.2 \times 0.03)
8Step 8

Premium_Charge

Premium_Charge=Life Premium Leg+Non-Life Premium Leg+Life Growth Add-On+Non-Life Growth Add-On\textit{Premium\_Charge} = \textit{Life Premium Leg} + \textit{Non-Life Premium Leg} + \textit{Life Growth Add-On} + \textit{Non-Life Growth Add-On}
9Step 9

Life Provision Leg

Life Provision Leg=Net Life TP×0.0045\textit{Life Provision Leg} = \textit{Net Life TP} \times 0.0045
10Step 10

Non-Life Provision Leg

Non-Life Provision Leg=max⁡(0,TP (Non-Life))×0.03\textit{Non-Life Provision Leg} = \max(0, \textit{TP (Non-Life)}) \times 0.03
11Step 11

Provision_Charge

Provision_Charge=Life Provision Leg+Non-Life Provision Leg\textit{Provision\_Charge} = \textit{Life Provision Leg} + \textit{Non-Life Provision Leg}

Understand the Operational Risk Volume Measure

Overview

This calculator is the first Operational Risk feeder module.[1] It calculates the Article 204 premium and provision volume measures and returns Premium_Charge and Provision_Charge for the SCR Final Integrator.

Input Terms

  • Premiums: Current and prior 12-month earned premiums for life, unit-linked life, and non-life business.
  • Technical Provisions: Life, unit-linked life, and non-life technical provisions.

Technical Rationale

The life premium and life provision bases are shown net of unit-linked values. This makes the Life minus UL adjustment explicit before the separate unit-linked expense add-on is calculated in the second feeder module.

Important Notes

  • Output handoff: Premium_Charge and Provision_Charge feed the Operational Risk SCR Final Integrator.
  • Growth add-on: The premium charge includes the Article 204 growth add-on where current volume exceeds 120% of the prior 12-month base.

Sources

  1. Delegated Regulation (EU) 2015/35 - Art. 204 (Operational risk) - 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.