IFRS 17 Implementation

IFRS 17 is the new principle-based reporting standard implemented by the International Accounting Standards Board (IASB) for insurance (and reinsurance) contracts. This new standard will warrant dramatic changes in the data management and operational workflows of life and annuity insurance companies.

IFRS 17 will change how profit emerges from a book of business, and will accelerate recognition of losses on contracts that are expected to be onerous. In addition, a tremendous amount of new data inputs and experience assumptions will be required. New models, new valuation processes and new visualization setup will be required. Audits will require greater granularity of record-keeping, model validation, and experience monitoring. A holistic revaluation of internal and external risk reports, audit trails, and controls will be required.

The most important choices regarding IFRS 17 implementation for life insurance and annuity contracts in India are the level of aggregation, and the accounting policy choices (configurations) related to risk adjustment and contractual service margin. Another key choice will be the model used to calibrate discount curves as per the requirement of market consistency.

At Annuity Risk, we are ready to assist with an end-to-end implementation of IFRS 17 accounting standard, or in any customized capacity. We will work closely with your enterprise risk team and your external auditor to choose the right valuation and accounting approaches that will lead to the best outcomes and timely implementation. Our proprietary analytics allow us to forecast significant financial reporting KPIs, and then track them as we progress through the implementation towards actual metrics. Expected impacts on equity and income patterns, including the effect of derivatives, on regulatory capital and key solvency metrics are tracked at multiple stages, and communicated with all stakeholders and auditors.

At Annuity Risk, we deliver the full IT infrastructure that goes well beyond the requirements of IFRS 17, and allows key decision-makers to extract powerful insights from their financial data. We ensure every calculation is auditable and every batch of analysis is properly stored and archived, preserving the greatest level of granularity possible. Our financial and regulatory reporting templates are designed specifically for the new IFRS 17 data schema while preserving the management’s viewpoints and style of risk management.