Services

IFRS 17 accounting standard: Insurance contracts

Final standard has been published and will be effective from 1 January 2021

Insurance companies have been waiting over a decade for a single global accounting standard that fits their unique and complex industry. Deloitte understands the insurance industry and its need to gain improved economies of scale and minimise duplication through mandated regulatory change.

What does it mean for insurers

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:

  • Current profit profiles will be impacted as the timing of profit recognition driven by the new model will change for most products
  • The ‘look and feel’ of Profit or Loss Statements will change to reflect the new metrics and presentation requirements
  • New KPIs will emerge and interactions with current KPIs will need to be assessed
  • Insurers will need to engage with their investors and key stakeholders in a timely fashion to take them along the journey
  • A properly designed implementation plan is key in getting the most value out of your IFRS 17 spend

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.

How IFRS 17 will be introduced

The standard is effective for annual periods beginning on or after 1 January 2021 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.

Deloitte’s response to IFRS 17

Webcasts and publications

Key contacts

Mark McQueen

Mark McQueen

Partner

Mark is Deloitte’s Global Head of Insurance Audit and has over 20 years’ experience of working with insurers, asset managers and intermediaries. He works with a range of multi-national, FTSE and natio... More

Roger Simler

Roger Simler

Partner

Roger is a Partner in Deloitte’s Insurance Practice and the EMEA Lead Partner for the Actuarial, Reward & Analytics practice. He has been with Deloitte since 2001 during which time he has worked on a ... More

Tamsin Abbey

Tamsin Abbey

Partner

Tamsin is a Partner in the UK Actuarial & Advanced Analytics and specialises in providing actuarial regulatory and risk support in a practical and pragmatic way. She is involved in external and intern... More

Richard Marshall

Richard Marshall

Partner

Richard is a UK Consulting Insurance Partner and has been with the firm for over 10 years. He has delivered a number of complex technology and Finance Change programmes for insurers and is the practic... More

Helen Evans

Helen Evans

Director

Helen is a Director in Deloitte UK’s Programme Leadership practise. She has worked as a Project & Programme Management Consultant for over fifteen years. Helen focuses on Insurance regulatory change p... More

Jon Garrett

Jon Garrett

Associate Director

Jon has 17 years’ experience dealing with the corporate and policyholder tax affairs of life and general insurance companies, and insurance brokers of all sizes. His advice work has covered on transfe... More