Issued in May 2017, IFRS 17 sets out the measurement and reporting requirements for a company writing insurance/reinsurance contracts including reinsurance/retrocession contracts it holds. In June 2020, the International Accounting Standards Board (Board) amended IFRS 17 Insurance Contracts. The new Standard, which replaces IFRS 4-Insurance Contracts, is applicable from annual reporting periods beginning on or after 1 January 2023

KEY TAKEAWAYS

Amendments to reduce Implementation cost

-Contracts to which IFRS17 applies

-Balance Sheet Presentation

-The effect of previous interim reports

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Amendments to make the results easier to explain

-Treatment of Acquisition Costs

-Reinsurance Contracts Held

-Profit Recognition & Use of Risk Mitigation Option

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Amendments to ease Transition

-Effective Date of Implementation & Temporary Exemption from IFRS9

-Investment Contracts with DPF

-Contracts acquired before Transition

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• These changes shall require Insurers to reassess the implementation efforts and likely to incur additionalcosts to re-evaluate their position with respect to data requirements, system design & configuration,modelling changes and accounting policy decisions.
• Several other topics such as “Annual cohorts”; liabilities acquired in their settlement period for acquisitionsafter the transition date were not amended by the IASB. It seems that “Annual Cohorts” will remain as aserious concern for stakeholders across geographies particularly for Participating Business.
• Nonetheless, deferral of effective date of standard will be a respite for many insurers to effectively planIFRS 17 implementation while stay focused to address the key business concerns amidst the Pandemic –COVID 19 and expected recessionary meltdown.