CASHING IN
of the new standard on key performance indicators ( KPIs ).
The report : ‘ Insurers ’ first reporting under IFRS 17 and IFRS 9 ’ details a series of in-depth analyses amongst insurers around the globe , with varying outcomes and observations , amongst them that , for the first time , the new rules will provide visibility on future profitability drivers of an insurer ’ s business ; that new disclosures on discount rates provide new insight into insurance contract measurement and results ; and that life and health insurers are incorporating the contractual service margin into their new business metrics , whilst non-life carriers
John Bowers , Actuarial Product Director , RNA Analytics
are most likely to be using the same basis as under IFRS 4 .
KPMG ’ s analysis showed that new disclosures under IFRS 17 provided previously unavailable insight into contract measurement and results , and that most insurers that issued interim reports under IAS 34 Interim Reporting disclosed reconciliations of insurance contract liabilities for the current and comparative period .
The findings also suggested that insurers are starting to incorporate IFRS 17 and IFRS 9 into their KPIs , but with varying levels of impact . In addition to new KPIs emerging , KPMG ’ s analysis suggested that insurers are now revising their performance targets .
Shareholders ’ equity
A degree of divergence in impact was also found by analysts at ratings agency , AM Best , which stated in a Special Report in May that insurers ’ disclosures pointed to a considerable variation in the effect of the new standard on shareholders ’ equity – a finding that was far more pronounced for life insurers than it was for non-life . For those in life , it said , the range of outcomes was biased to the downside , whilst for non-life , the opposite was found to be the case . Composite carriers have thus been found to have experienced a balance of effects , leading to overall stable shareholders ’ equity
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