Recently KPMG and PwC have published reports regarding the implementation of IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments for the year-end 2023. These reports offer valuable insights into insurers’ adoption of IFRS 17 and its impacts on financial reporting and performance measurement.
KPMG Report Summary:
KPMG’s analysis covered 53 insurers’ reporting on IFRS 17 and IFRS 9 for the year ended 31 December 2023. Key observations include:
- Insurers provided detailed accounting policies and disclosures, with varying levels of specificity, for example on the methodologies used to determine discount rates, how coverage units are determined to recognise the contractual service margin (CSM) in profit or loss and judgements made in selecting measurement models.
- Integration of IFRS 17 and IFRS 9 into key performance indicators (KPIs) across all sectors.
- Reduction in accounting mismatches and income statement volatility since adopting IFRS 9 and IFRS 17.
PwC Report Summary:
PwC’s analysis focused on major UK listed insurance companies’ financial statements for their 2023 annual reports under IFRS 17. Key points include:
- Limited new information on key judgements and impacts compared to interim 2023 reporting.
- Divergences in approaches, calibrations, and levels of granularity despite mandatory disclosures.
- Continued use of adjusted operating profit (AOP) and adjusted equity as key metrics for life insurers, and the combined ratio (COR) for general insurance companies.
For more detailed information, please refer to the full reports from KPMG and PwC.
Insurance Europe