Insurance accounting redefined

A recent article published by A Plus, the journal of the Hong Kong Institute of Certified Public Accountants, discussed IFRS 17 – one of the most significant changes to insurance accounting in decades.

Francesco Nagari, Global IFRS 17 Leader at Deloitte, explained both benefits and challenges brought by the new standard. Higher financial statements' transparency is expected because insurers will need to estimate the cash flows and disclose both an explicit risk adjustment for prudence and their expected profit (the Contractual Service Margin – CSM). This new level of transparency will help better reflect business performance of insurers in Hong Kong. As the level of transparency and comparability raises, insurers may be able to enjoy easier access to capital markets. In the meantime, technology readiness and the availability of actuarial and accounting professionals who are capable of implementing IFRS 17 can be a challenge. Read the full article here.

Source: A Plus