Description: This article highlights the fact that new requirements for disclosure of average liability duration and interest rates could lead to diversity in practice. It also recognizes that elements of the new disclosure requirements will enable financial statement users to perform their own crude estimates of these averages in ways that could help them to better understand the liabilities and to compare companies using consistent methods. Finally, the article describes how companies might also find value in such crude estimates.

Description: The implementation of the IFRS 17 insurance accounting standard has brought significant changes to the financial reporting landscape of insurance companies. With new disclosure requirements and altered profit analysis, understanding and interpreting future profitability have become a topic of concern for the industry. While stability remains a key objective for insurance companies, the earning patterns might become more volatile especially when the contractual service margin (CSM) is exhausted, and a loss component (LC) needs to be established. Reinsurance, a common risk mitigation tool, can play a pivotal role in managing earnings volatility and minimizing losses for onerous measurement units. In this article, we propose a new key performance indicator (KPI) called “loss recoverability” to assess the performance of reinsurance treaties in achieving these objectives. We explain how this KPI can be utilized in multiple scenarios to evaluate the effectiveness of reinsurance strategies and pursue stability in earning patterns.

Description: The IAA has published a textbook-sized monograph on implementing risk adjustments under IFRS 17. This monograph will be helpful to those calculating the risk adjustment and those who want to know what the risk adjustment represents and how if affects period to period reporting.

Description: Recent and pending changes in financial reporting standards and regulations such as IFRS 17 and US GAAP Targeted Improvements are ramping up the performance pressures on actuarial models. New infrastructure technology in the cloud is driving modeling options that may well help actuaries successfully and economically meet these challenges and unlock even greater transformational change.

Description: This article describes a simple but powerful tool for use by valuation actuaries and auditors when evaluating current assumptions for use in GAAP net premium reserve methods that require retrospective updating for actual experience and assumption changes. As a supplement, this tool can fill some holes left by existing tools. It produces results that can be compared to materiality thresholds at any level of aggregation, from a single reserve cohort up to the combination of all cohorts for all products subject to retrospective net premium reserve requirements. It can also serve as a benchmarking tool for estimated the possible effects of an assumption change or to help in explaining the effects of an actual assumption change.