On Thursday 18 May, the IASB published its new Standard on Insurance Contracts with the ambition of introducing a consistent and transparent financial reporting language across the global insurance sector. The path to implementing IFRS 17 will not be easy but it is fair to say that it carries varying layers of complexity for different insurers depending on the type of business they underwrite.
Some of the key impacts that will be felt across the sector, albeit more profoundly by insurers that write long term contracts are:
We encourage you to visit our Global IFRS 17 website for more detailed information on IFRS 17 technical requirements, summaries of the standard and technical papers.
The standard is effective for annual periods beginning on or after 1 January 2023 with early application permitted. Entities must apply the standard retrospectively unless impracticable in which case the modified retrospective approach or the fair value approach is applied.
The implementation of the standard is likely to bring significant changes to an entity’s processes and systems, and will require much greater co-ordination between many functions of the business, including Finance, Actuarial and IT.