In this workout, we've been given some extracts from a company's financial statements and that company is Generali, an Italian insurance company. Now, we've been asked to calculate their solvency capital ratio using the information below. Now, on the left-hand side, we've got their calculation of solvency capital requirements, and that's broken down by risk type. They've also given us the calculation before diversification, so that's 34.5 billion. And then after diversification, so that's 27.1 billion. So you can see it's quite a large diversification adjustment, reflecting the fact that they've got some very diverse operations. Also, as you can see, as is normal for insurance companies, the financial risk component is the largest part of the solvency capital requirement. Now, there's a couple of other adjustments at the bottom before they get to the final solvency capital requirement of 22.2 billion. And that's the number we are gonna need in our calculations. So we are just gonna type that in below the table.

Now, on the right-hand side, you can see their reconciliation of IFRS equity to own funds. But the one thing that we've not been given is the final number for own funds. But that's okay, because we've been told the IFRS equity is 26.2 billion, and we've got all the adjustments that are needed to get us to own funds. So that's the deduction of intangibles, the mark to market adjustment on assets and liabilities, and the exclusion of net deferred tax assets as well. So again, we're gonna need to type some numbers in below the tables and we'll start off with the shareholders equity of 26.2 billion. And someone's very helpfully put in all the other adjustments for us. So to get to own funds, we just need to sum all of those items above. So that gives us own funds of 46.3 billion. Now, to calculate the solvency ratio, it's very straightforward 'cause we just take the own funds and divide that by the solvency capital requirement. And that gives a solvency ratio of 208.4%. That's well in excess of the 100% required for insurance companies. So Generali clearly has a good level of capital.