Non-Life Fire Risk Simplification

Overview

This calculator implements the simplified capital requirement for Non-Life Fire Risk within the Solvency II standard formula.^[1] It approximates the largest fire concentration across industrial, commercial, and residential exposure groups.

Input Terms

• Industrial Exposures: The industrial fire exposure amounts used to identify the largest industrial concentration.^[1]
• Commercial Exposures: The commercial fire exposure amounts used to identify the largest commercial concentration.^[1]
• Residential Exposures: The residential fire exposure amounts used to identify the largest residential concentration.^[1]
• Average Sum Insured for Residential Property: The average residential property sum insured used in the market-share-based residential exposure proxy.^[1]
• Maximum Country Market Share for Residential Property: The undertaking's maximum country market share used to scale the residential exposure proxy.^[1]

Technical Rationale

Article 90c provides a simplified fire-risk calculation based on the maximum concentration among industrial, commercial, and residential exposure measures.^[1] The result supports the fire catastrophe component connected to the Article 132 fire risk sub-module.^[2]

Important Notes

• Exposure completeness: Industrial, commercial, and residential inputs should cover the largest relevant concentrations before selecting the maximum simplified fire amount.^[1]
• Gross vs. Net SCR: This simplification estimates the standalone Non-Life Fire 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 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]