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Whitepaper: Calculating the IFRS 17 Risk Adjustment

IFRS 17 introduces the concept of a risk adjustment for non-financial risk. The IFRS 17 risk adjustment will influence how profit from insurance contracts is reported and emerges over time.
21 AUGUST 2018 | BY MOODY'S ANALYTICS 

Moodys

IFRS 17 introduces the concept of a risk adjustment for non-financial risk. The IFRS 17 risk adjustment will influence how profit from insurance contracts is reported and emerges over time. While the risk adjustment must satisfy certain conditions, the method for its calculation is not prescribed and is the choice of the insurance company. As such, there are many potential methods of calculation.

This paper provides an overview of the IFRS 17 risk adjustment and highlights some of the different features that should be considered in advance of implementing the new accounting standard. Download this paper now to gain an overview of the requirements and other considerations when calculating risk adjustment, and gain practical insights about the following calculation methods:

  • Cost of Capital
  • Value at Risk (VaR)
  • Margins for Adverse Deviation

 

 


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