Thursday, September 4th, 2025
Michael Winkler and Sunil Kansal explain the key challenges of applying the time value of money under IFRS 17. Earlier standards applied discounting unevenly. Many non-life insurers avoided discounting claims reserves to keep a conservative margin. IFRS 17 changes this by requiring a consistent approach for all long-term cash flows. Discount rates now reflect financial risks, while insurers must add a Risk Adjustment for non-financial risks. The real challenge appears in many markets where reliable market data is scarce, making it hard to set credible discount rates.
Read More: https://documentacion.fundacionmapfre.org/documentacion/publico/es/bib/188107.do
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