IFRS 17 implementation


On May 18, 2017, the International Accounting Standards Board (IASB) unveiled IFRS 17 Insurance Contracts, a pioneering standard set to replace IFRS 4, an interim standard introduced in 2004. IFRS 17, effective from January 1, 2023, is designed to enhance transparency, allowing investors and other stakeholders to gain a clearer understanding of an insurer’s risk exposure, profitability, and overall financial health. Despite its enactment, the journey toward full IFRS 17 compliance remains a complex challenge for insurers worldwide, necessitating a profound transformation in accounting, actuarial, and reporting methodologies.

At Shasat Consulting, we are committed to guiding insurance companies globally through the intricate landscape of IFRS 17 implementation. Our team, bolstered by extensive expertise in accounting, actuarial science, and the insurance industry, is poised to collaborate closely with your organization. Our goal is to facilitate your seamless transition to IFRS 17 compliance, ensuring alignment with your financial and actuarial transformation initiatives as well as overarching strategic objectives.

Our approach is holistic and forward-thinking. We offer a comprehensive suite of services, from imparting technical knowledge and strategic planning to the design and execution of tailored implementation strategies. Moreover, our commitment extends beyond mere compliance; we aim to empower your organization through the automation of critical functions and the integration of financial, actuarial, and analytical processes. This integration is crafted to deliver enduring value, positioning your business for sustained success in the evolving insurance landscape.

Let Shasat Consulting be your partner in navigating the complexities of IFRS 17 implementation. Together, we will unlock lasting benefits for your organization, reinforcing your competitive edge in the global insurance market.

Implementation of IFRS 17 Insurance Contracts – Non-Life Companies

 

Pre-condition:

Consistent and comprehensive data available for cash flow projections

 

Support in the following areas:

  • Grouping of contracts/identification of onerous business
  • Check whether Premium Allocation Approach (PPA) is applicable/preferable
  • For General Model:
    • Definition of Coverage Units for amortization of the Contractual Service Margin
    • Definition of Risk Adjustment
  • Comparison PPA vs General Model (Building Block Approach)
  • Determination of Contract Boundaries
  • Risk Adjustment for Liability for Incurred Claims
  • Modeling of Reinsurance Held
  • Impact Analysis
  • IFRS 17 Knowledge sharing

On an ongoing basis:

  • Update of the fulfilment cash flows (including Risk Adjustment)
  • Update of the Coverage Units / Contractual Service Margin

Implementation of IFRS 17 Insurance Contracts – Life Companies

 

Pre-conditions:

  • Consistent and comprehensive data available for cash flow projections
    (for liabilities as well as for assets)
  • Implementation of IFRS 9 and IFRS 13 clarified

 

Support in the following areas:

  • Grouping of contracts / identification of onerous business
  • Check whether Variable Fee Approach (VFA) is applicable/preferable
  • Identification/separation of (distinct or non-distinct) investment components
  • Determination of Contract Boundaries
  • Cash flow projections
  • Definition of applicable discount rates
  • Choice on interest rate changes flowing through profit/loss statement or Other Comprehensive Income
  • Definition of Risk Adjustment for Liability for Remaining Coverage
  • Definition of Risk Adjustment for Liability for Incurred Claims
  • Definition of Coverage Units for amortization of the Contractual Service Margin
  • Modeling of Reinsurance Held
  • Impact Analysis

On an ongoing basis:

  • Update of the fulfilment cash flows (including Risk Adjustment)
  • Update of the Coverage Units / Contractual Service Margin

 


Contact Us

For questions, support, or to learn more about our IFRS 17 and Actuarial modelling services, please reach out to us.  Connect with us through our Contact Us page, where you can find various ways to get in touch, including email, phone, or a convenient contact form. Our dedicated consulting team is ready to support you with your needs and ensure you have all the information required to move forward. We look forward to hearing from you and are eager to assist in any way we can.