Intangible Asset Risk

Overview

This calculator implements the gross capital requirement for the Intangible Asset Risk module within the Solvency II standard formula.^[1]

Input Terms

• Intangible Assets: The Solvency II value of recognized intangible assets, such as eligible software or brands, as stated on the economic balance sheet.^[2]
• Stress Factor: The prescribed 80% regulatory stress factor applied to the carrying value of these assets.^[1]

Technical Rationale

Under Solvency II, most intangible assets, such as goodwill, are valued at zero. Specific identifiable intangibles may be recognized only when the Article 12 valuation conditions are met.^[2]

The calculation applies the Article 203 80% stress factor to recognized intangible assets. Unlike market or underwriting risks, intangible asset risk is not diversified; Article 87 adds it separately to the diversified BSCR module result.^[1][3]

Important Notes

• Linear Addition: To ensure regulatory accuracy, the Intangible Asset Risk is not part of the BSCR square-root aggregation. It is a linear add-on that must be included after the diversified BSCR result has been established.
• Valuation Prerequisite: Only intangible assets that meet the strict recognition criteria under Article 12 of the Delegated Regulation should be entered here. Misclassification of unrecognized items will overstate the total own-funds and the corresponding capital charge.
• Gross vs. Net SCR: This calculator determines the standalone Intangible Asset Risk SCR. Solvency II risk is only finalized as a net impact on Basic Own Funds 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.^[4]
• Reporting: The displayed result is intended to support the corresponding standard-formula component feeding the S.25.01.01 standard-formula reporting view.^[5]