Non-life underwriting risk module

(1) The non-life underwriting risk module reflects the risk arising from non-life insurance obligations, in relation to the risks covered and the processes used in conducting the business. The risk module must take into account the uncertainty in the results of insurance undertakings in relation to existing insurance obligations and to the new business expected to be written over the following twelve months.
(2) The non-life underwriting risk module is calculated in accordance with Annex 3 as a combination of the capital requirements for at least the risk of loss, or of adverse change in the value, of insurance liabilities, resulting from: 1. fluctuations in the occurrence, frequency, and severity of insured events, and in the timing and amount of claim settlements (non-life premium and reserve risk), and 2. significant uncertainty in pricing and provisioning assumptions related to extreme or exceptional events (non-life catastrophe risk).