annual report 2020 - Flipbook - Side 14
INDUSTRIENS PENSIONSFORSIKRING A/S ANNUAL REPORT 2020
RISK AND SOLVENCY
Risk and solvency
Table 10
Solvency capital requirement and own funds
2019
2020
Insurance risk, life
513
556
Insurance risk, sickness-accident
129
134
4,277
4,172
DKK mill.
Solvency capital requirement and own
funds
There are common solvency regulations in the
EU. The aim of the regulations is to ensure
effective risk management and uniform
calculation of solvency capital requirements and
own funds for EU insurance and pension
companies. Provisions for insurance contracts
are calculated on the basis of a discounting yield
curve which is published by the common EU
supervisory authority, EIOPA, and a so-called
risk margin is recognised to cover the
uncertainty in the cash flows included in
calculation of the provisions.
Industriens Pension has decided to calculate the
solvency capital requirement according to the
Solvency II standard model (standard formula)
and to calculate provisions on the basis of the
EIOPA yield curve without volatility adjustments.
Insurance contracts in Industriens Pension do
not contain earnings for equity, and thus
provisions do not contain a profit margin.
The solvency capital requirement is calculated
on the basis of a quantification and a weighting
of the different types of risk according to the
regulations stipulated in the Solvency II standard
model (standard formula). Overall, the different
risks are categorised as insurance risks, market
risks, counterparty risks and operational risks.
The insurance risks category primarily includes
the consequences of members living longer
than anticipated, an increase in the number of
disabilities, and a possible disaster situation with
extraordinary increases in the number of deaths
and disabilities within a short period.
Market risk
Counterparty risks
Effect of diversification
Operational risks
The market risks category includes the
consequences of negative changes in financial
markets primarily resulting from interest-rate
changes, a fall in share prices and currencies as
well as drops in property prices.
The solvency capital requirement amounted to
DKK 2.5 bn. at the end of 2020, and thereby
decreased by DKK 0.6 bn. compared with last
year. Total own funds of DKK 10.1 bn. have been
accepted to cover this. This corresponds to
excess liquidity of DKK 7.6 bn. and Industriens
Pension is thus particularly well consolidated.
61
21
-493
-494
98
101
Covered by provisions
-1,473
-1,946
Total solvency capital requirement
3,112
2,544
Own funds
9,895
10,125
Accepted own funds
9,895
10,125
Solvency ratio
318%
398%
Solvency capital requirement
Own funds
Excess liquidity
2.5
10.1
7.6
DKK BN.
DKK BN.
DKK BN.
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