Annual Report IPF 2021 - Flipbook - Side 14
INDUSTRIENS PENSIONSFORSIKRING A/S
ANNUAL REPORT 2021
RISK AND SOLVENCY
Risk and solvency
Table 10 Solvency capital requirement and own funds
DKK mill.
Insurance risk, life
Insurance risk, sickness-accident
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 own funds, 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 members
who lose the ability to work, and a possible disaster
situation with extraordinary increases in the
number of deaths and sick within a short period.
Market risk
Counterparty risks
Effect of diversification
Operational risks
Covered by provisions
Total solvency capital requirement
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.
2020
2021
556
510
134
132
4,172
6,190
21
27
-494
-479
101
105
-1,946
-2,889
2,544
3,597
Own funds
10,125
11,033
Accepted own funds
10,125
11,033
398%
307%
Solvency ratio
The solvency capital requirement amounted to DKK
3.6 bn. at the end of 2021, and has thereby
increased by DKK 1.1 bn. compared with last year,
primarily because of an increase in market risks, in
particular share risks. Total own funds of DKK 11.0
bn. have been recognised to cover this. This
corresponds to excess liquidity of DKK 7.4 bn. and
Industriens Pension is thus particularly well
consolidated.
Solvency capital requirement
Own funds
Excess liquidity
3.6
11.0
7.4
BN. DKK
BN. DKK
BN. DKK
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