The Capital‑on‑Capital Cost in Solvency II Risk Margin.
This paper explores potential revisions to the calculation of the #solvencyII#risk margin (RM) and contributes to the ongoing discussion by formally defining the concept of capital‑on‑capital cost. The paper highlights the need for practitioners to consider capital‑on‑capital costs in their #lifeinsurance#riskmanagement frameworks and for policymakers to carefully evaluate the potential impact of any revisions to the calculation of the RM.