With the IFRS 17 accounting standard, insurers need to understand the patterns of profit emergence that arise under the standard, and how current business and methodology decisions affect such patterns.
With the IFRS 17 accounting standard, insurers need to understand the patterns of profit emergence that arise under the standard, and how current business and methodology decisions affect such patterns. As a principles-based standard, insurers must make several immediate decisions about their specific implementation. These decisions can have a major impact on the timing of reported profit and loss.
In this paper, we look at the interaction between IFRS 9 and IFRS 17, illustrated by a case study using an IFRS 17 contract group consisting of immediate annuities. In particular, we consider the impact of different choices of liability discount rate on expected profit emergence and earnings volatility.
Read Profit Emergence Under IFRS 9 and IFRS 17: The impact of choice of liability discount rate to learn more.