Insurers explore 'risk geographies' for capital modelling

Insurers are looking at new ways to model their capital requirements. Risk geographies is one method being explored by some insurers. While the technique can be a powerful tool, it does present some implementation challenges. Clive Davidson reports


The fundamental idea of solvency capital is to ensure that a company has the resources to survive a worst-case scenario – a crisis or period of stress that threatens its viability. Solvency II defines the worst case as a one-in-200-year event and provides a standard formula for calculating the capital necessary to absorb the subsequent losses, or allows insurers to use their own models to do so.

Solvency II acknowledges that the standard formula or internal model cannot fully capture the risks

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

The future of life insurance

As the world constantly evolves and changes, so too does the life insurance industry, which is preparing for a multitude of challenges, particularly in three areas: interest rates, regulatory mandates and technology (software, underwriting tools and…

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here