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Life Mortality Risk Simplification

Calculate the Life Mortality Risk Capital Requirement instantly.

%
%
€

Mortality Stress

15.0%

×

Average Mortality Rate

0.8%

×

Total Discounted CAR Contribution

€237 890 409

=

Simplified Mortality SCR

€285 468

1Step 1

Simplified Mortality Capital Requirement

SCRmort=Δmort×q×∑kContributionk\mathrm{SCR}_{mort}=\Delta mort\times q\times\sum_k Contribution_k

Understand the Life Mortality Risk Simplification

Overview

This calculator implements the simplified capital requirement for Life Mortality Risk within the Solvency II standard formula.[1] It applies the Article 91 final aggregation after the projection-year discounted capital-at-risk contributions have been prepared.

Input Terms

  • Average Mortality Rate (q): The expected average mortality rate across insured persons and future years, weighted by the sum insured.[1]
  • Mortality Stress Rate: The Article 91 mortality stress applied to the simplified calculation.[1]
  • Total Discounted Capital at Risk Contribution: The sum of prepared projection-year contributions. Life Mortality Projection Year Contribution calculates one yearly contribution from capital at risk, survival weighting, and the relevant spot rate.[1]

Technical Rationale

Article 91 replaces a full stressed balance-sheet revaluation with a formula that scales the prepared discounted capital-at-risk contribution by the mortality stress and expected mortality rate.[1] The simplification is a proportional substitute for a full mortality stress only where the Article 91 conditions are supportable; broader Life Risk aggregation remains a separate capital requirement step.

Important Notes

  • Applicability: The simplification is only appropriate where the proportionality conditions for simplified standard-formula calculations are met.[2]
  • Gross vs. Net SCR: This simplification estimates the standalone Life Mortality Risk SCR. Solvency II risk is only finalized as a net impact on Basic Own Funds after diversification in Life Risk, then within BSCR, and after the top-level LAC TP and LAC DT adjustments.
  • Regulatory deviation: Material deviation from the standard-formula assumptions or from the conditions supporting this simplification may support a capital add-on or a move toward a fuller or internal-model approach where justified.[3]
  • Reporting: The simplified result is intended to support the corresponding standard-formula component for the S.25.01.01 standard-formula reporting view, not to replace the full article-based result where the simplification is not justified.[4]

Sources

  1. Delegated Regulation (EU) 2015/35 - Art. 91 (Simplified calculation of the capital requirement for life mortality risk) - EIOPA
  2. Delegated Regulation (EU) 2015/35 - Art. 88 (Proportionality) - EIOPA
  3. Directive 2009/138/EC - Art. 37 (Capital add-on) - EIOPA
  4. Commission Implementing Regulation (EU) 2023/894 - QRT S.25.01.01 (SCR standard formula) - EUR-Lex

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.