Reviewed by Apex Insurance Brokers · Last reviewed 2026-06-22
~2 min read
Reviewed by Apex Insurance Brokers · Last reviewed 2026-06-22
Category: Capital management · Reviewed by Amy Price, Account Executive · Last reviewed
The Solvency Capital Requirement (SCR) is the amount of own funds an EU/UK insurer must hold to ensure that, with 99.5% probability, it will be able to meet its obligations to policyholders and beneficiaries over the next 12 months. It is the central capital metric of Solvency II.
Calibration
Defined in Article 101 of Directive 2009/138/EC as the Value at Risk of basic own funds subject to a confidence level of 99.5% over a one-year period. Equivalent to a 1-in-200-year loss event.
Calculation methods
Firms may calculate the SCR using:
Standard formula — a prescribed module-by-module calculation set out in the Delegated Regulation 2015/35.
Full internal model — bespoke stochastic modelling subject to PRA approval (Articles 112–127).
Partial internal model — internal model for some risks combined with standard formula for others.
Undertaking-specific parameters (USPs) — replacing certain standard parameters with insurer-specific calibrations.
Our service promise. We acknowledge every quote request the same working day. For straightforward risks, indicative terms typically follow within five working days. Complex risks — higher-risk buildings, cladding, mid-term proposals requiring fresh underwriting — may take longer; we’ll send you a progress note by the end of the fifth working day in those cases.