IFRS 17 implementation

IFRS 17 Implementation Services

On May 18, 2017, the International Accounting Standards Board (IASB) introduced IFRS 17 Insurance Contracts. This groundbreaking standard, set to replace the interim IFRS 4 introduced in 2004, will take effect on January 1, 2023.

IFRS 17 aims to enhance transparency, thereby enabling investors and other stakeholders to gain a clearer insight into an insurer’s risk exposure, profitability, and financial status. However, transitioning to full compliance with IFRS 17 poses a significant challenge for insurers across the globe, requiring a comprehensive overhaul of accounting, actuarial, and reporting practices.

Shasat Consulting’s Role in IFRS 17 Implementation

At Shasat Consulting, we are dedicated to assisting insurance companies worldwide in navigating the complexities of IFRS 17 implementation. Leveraging our extensive expertise in accounting, actuarial science, and the insurance industry, we are poised to offer close collaboration with your organization. Furthermore, we aim to facilitate a seamless transition to IFRS 17 compliance, aligning with your financial and actuarial transformation initiatives as well as broader strategic objectives.

Our Comprehensive Approach

Our strategy is both holistic and forward-looking. We provide a broad array of services, ranging from sharing technical knowledge and strategic planning to designing and implementing customized strategies. Furthermore, our commitment goes beyond achieving compliance; we strive to enhance your organization by automating essential functions and integrating financial, actuarial, and analytical processes. This tailored integration is designed to deliver long-term value, preparing your business for continued success in the dynamic insurance industry.

Let Shasat Consulting be your ally in overcoming the challenges of IFRS 17 implementation. Together, we can secure enduring advantages for your organization, strengthening your competitive position 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
    • Liability for Incurred Claims:
      • Determination of applicable discount rates
      • Definition of an adequate Risk Adjustment
    • 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
    • Identification/separation of (distinct or non-distinct) investment components (also for Reinsurance Held!)
    • 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.