What is 'minimum risk amount' in SAP FS-PM - Policy Management?

minimum risk amount - Overview

• Component: FS-PM

• Component Name: Policy Management

• Description: The insurance character of a unit-linked life insurance policy is guaranteed by the payment of a minimum risk amount MRA in case of death, in addition to the available capital. The death benefit is defined as the maximum amount from a minimum death benefit total and the reserve increase by the minimum risk amunt. The minimum risk amount is greater than zero, to guarantee the insurance character.

minimum risk amount - Details

• 
  Key Concepts: 
  Minimum risk amount is a feature of the SAP FS-PM Policy Management component. It is used to define the minimum amount of risk that must be taken into account when making decisions about policy management. This helps to ensure that the decisions made are based on a thorough assessment of the risks involved. 
  
  How to use it: 
  The minimum risk amount can be set in the SAP FS-PM Policy Management component. This can be done by navigating to the “Risk Management” tab and selecting “Minimum Risk Amount” from the drop-down menu. The user can then enter the desired minimum risk amount and save the changes. 
  
  Tips & Tricks: 
  When setting the minimum risk amount, it is important to consider the potential risks associated with the policy decisions being made. The minimum risk amount should be set at a level that is appropriate for the specific situation and should be adjusted as needed. 
  
  Related Information: 
  For more information about setting the minimum risk amount in SAP FS-PM Policy Management, please refer to the official SAP documentation.