MCR – Minimum Capital Requirement

The concept of the MCR (Minium Capital Requirement) is rather straightforward. Under the Solvency II regime it is the minimum capital requirement for an insurance company to write business. If the SCR (Solvency Capital Requirement) is breached it is a serious matter. If the MCR is breached it is even worse. Find out how it is calculated below. Calculation The calculation of the MCR follows 5 steps. 1)  Calculate the…

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Binary Events

The concept of Events Not In Data – ENID – is new in terms of terminology. It has also been called Binary Events. It refers to events that may happen in the future and then have a negative impact on the companies loss-ratio. The Low Frequency High Severity events is likely to be included here. Asbestos was an example of a typical ENID. Nowadays since these are in the data…

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