- New components like the unbiased Cash Flows, Risk Adjustment, Discount Rate and CSM are introduced. This means the insurer needs to understand the IFRS 17 principles and decide how to implement IFRS 17. For example which measurement model to choose for an insurance product, which transition measure to user. Read here more about the IFRS 17 model, and here about the transition period.
- There is also big impact on the balance and income statement. Insurance liability needs to be specified in a different way, the importance of gross written premiums disappear, while equity will be impacted.
- Big impact on presentation of the balance and P&L. Read here more about the disclosure
- Many people are involved in the IFRS 17 change and will need training to get informed about the new accounting policies and how the company has implemented it
- Much interaction and co-operation between actuarial, IT and financial departments is needed. For example actuarial assumptions need to be discloses through tooling.
- Faster disclosure is needed, which needs faster processes within the organization
- We need lower granularity data, therefore the policy administration needs to cope with more detailed information
- Risk engines are needed to calculate the CSM and cope with all the different groups
- The general ledger system will change as new measurements are introduced
- The presentation is changed, so also the reporting systems needs to change.
- Pricing model (of the actuaries) need to be made transparent.