Accounting For Insurance Liabilities
Accounting For Insurance Liabilities
Accounting For Insurance Liabilities
• The final outcome of IFRS 17 reflects the long and difficult discussions:
complexity!
CSM
• compensation for the uncertainty about the amount and timing of future cash
(3) flows
Risk • equivalent to a Risk Margin in Solvency 2
adjustment • method not prescribed
Interest
Absorbing
(4) Release for accretion (4)
changes in
CSM the period (locked in CSM
estimates
rate)
(3) (3)
Change in Release for
Risk future Risk
adjustment the period
estimate adjustment
Unwind for
(2) Change in Discounting the period (2)
Discounting discount rate (locked in) (locked in Discounting
rate)
Experience –
(1) Change in Change in actual vs (1)
Cashflows
financial non-financial expected
Cash Flows in/out Cash Flows
assumptions assumptions cashflows
Insurance
contract
Direct BBA – Variable fee Unit Linked
Participating