Solvency Capital Requirement (SCR)

The Solvency Capital Requirement (SCR) is the minimum amount of financial reserves an insurance company must hold to ensure it can meet its obligations, even if unexpected events or large claims occur. It acts as a safety buffer, calculated based on the company's specific risks, to protect policyholders and maintain financial stability. Essentially, SCR is a safeguard to ensure the insurer remains solvent under stressful conditions, promoting confidence for both the company and its customers.