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Cashflow Projection

Calculate the Projected Gross Liability Cashflows Total instantly.

€
€
€
€
%

Projected Gross Liability Cashflows Total

€22 251 788

Annual Gross Liability Cashflow

€6 000 000

Runoff Factor

0.85

Gross Liability Cashflow Year 1

€6 000 000

Gross Liability Cashflow Year 2

€5 100 000

Gross Liability Cashflow Year 3

€4 335 000

Gross Liability Cashflow Year 4

€3 684 750

Gross Liability Cashflow Year 5

€3 132 037

1Step 1

Runoff Factor

Runoff Factor=max⁡(100−Annual Runoff,0)100\textit{Runoff Factor} = \frac{\max(100 - \textit{Annual Runoff}, 0)}{100}
2Step 2

Annual Gross Liability Cashflow

Annual Gross Liability Cashflow=Annual Claims / Benefits Outflows+Annual Expense Outflows+Annual Lapse / Surrender Outflows−Annual Premium Inflows\textit{Annual Gross Liability Cashflow} = \textit{Annual Claims / Benefits Outflows} + \textit{Annual Expense Outflows} + \textit{Annual Lapse / Surrender Outflows} - \textit{Annual Premium Inflows}
3Step 3

Gross Liability Cashflow Year 1

Gross Liability Cashflow Year 1=Annual Claims / Benefits Outflows+Annual Expense Outflows+Annual Lapse / Surrender Outflows−Annual Premium Inflows\textit{Gross Liability Cashflow Year 1} = \textit{Annual Claims / Benefits Outflows} + \textit{Annual Expense Outflows} + \textit{Annual Lapse / Surrender Outflows} - \textit{Annual Premium Inflows}
4Step 4

Gross Liability Cashflow Year 2

Gross Liability Cashflow Year 2=Annual Gross Liability Cashflow×Runoff Factor\textit{Gross Liability Cashflow Year 2} = \textit{Annual Gross Liability Cashflow} \times \textit{Runoff Factor}
5Step 5

Gross Liability Cashflow Year 3

Gross Liability Cashflow Year 3=Annual Gross Liability Cashflow×Runoff Factor2\textit{Gross Liability Cashflow Year 3} = \textit{Annual Gross Liability Cashflow} \times {\textit{Runoff Factor}}^{2}
6Step 6

Gross Liability Cashflow Year 4

Gross Liability Cashflow Year 4=Annual Gross Liability Cashflow×Runoff Factor3\textit{Gross Liability Cashflow Year 4} = \textit{Annual Gross Liability Cashflow} \times {\textit{Runoff Factor}}^{3}
7Step 7

Gross Liability Cashflow Year 5

Gross Liability Cashflow Year 5=Annual Gross Liability Cashflow×Runoff Factor4\textit{Gross Liability Cashflow Year 5} = \textit{Annual Gross Liability Cashflow} \times {\textit{Runoff Factor}}^{4}
8Step 8

Projected Gross Liability Cashflows Total

Projected Gross Liability Cashflows Total=∑i=15Gross Liability Cashflowi\textit{Projected Gross Liability Cashflows Total} = \sum_{i=1}^{5} \textit{Gross Liability Cashflow}_{i}

Understand the Cashflow Projection

Overview

This calculator projects a five-year gross liability cashflow stream for technical-provisions work under Solvency II.[1] It turns visible premium, claim, expense, and lapse assumptions into a simple run-off profile that can then be discounted on the `BEL Valuation` page.

Input Terms

  • Annual Premium Inflows: Expected yearly premiums received from policyholders.
  • Annual Claims / Benefits Outflows: Expected yearly claim or benefit payments.
  • Annual Expense Outflows: Expected yearly maintenance and claims-handling expenses.
  • Annual Lapse / Surrender Outflows: Expected yearly cash outflows linked to lapses or surrenders.
  • Annual Runoff: The yearly percentage reduction applied to the prior year's cashflow level.

Technical Rationale

Technical provisions start with expected future cashflows. This page isolates that projection task from discounting and from reinsurance netting so users can build the chain one step at a time. The engine first derives a yearly gross liability cashflow and then applies a simple runoff factor over a fixed five-year horizon.

That makes the page useful as a first-pass canonical projection engine without pretending to be a full policy-by-policy actuarial model. The output is a clean stream that can be carried into the discount-curve and BEL steps already used elsewhere in the Pillar 1 chain.

Important Notes

  • This page projects gross liability cashflows only. Reinsurance effects stay on the dedicated `Reinsurance Recoverables` page.
  • The horizon is fixed at five years in this first version so the result stays readable and easy to chain into other engines.
  • The output should be interpreted as a controlled projection helper, not as a substitute for a full actuarial production model when more granular policy data is required.

Sources

  1. Directive 2009/138/EC - Art. 77 (Calculation of technical provisions) - 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.