Description: Insurers buy reinsurance for a variety of reasons, but an insurer’s accounting rules and solvency regulations are inevitably at the heart of the decision. Whether they are primary drivers or simply help insurers judge acceptable pricing for a risk- or service-motivated transaction, these rules and regulations are a key part of the equation.

Description: As IFRS 17 Insurance Contracts casts its net wide, reinsurers find themselves sailing toward new horizons of financial reporting. The transition to IFRS 17 is not just a regulatory compliance exercise but a transformational journey that reshapes the financial reporting landscape for reinsurers. The enhanced disclosure requirements, the granular contract-level accounting, and the measurement consistency across different reinsurance contracts promise to unveil a clearer financial picture. Yet, these new reporting waters could be choppy, demanding a sturdy understanding and application of IFRS 17's principles. This article describes benchmarking of IFRS 17 information provided at HY 2023 for four reinsurers.

Description: The selection of the economic capital calculation approach becomes more of a modeling decision. Now let us pause here and think about the arbitrage-free assumption at the beginning. At any time, there can be only one price on any asset. If the company considers the price calculated above as the fair price for its products, then it must hold true that the same price has to be arrived at if the company uses a real-world pricing approach instead of a risk-neutral approach. This gives us a very good basis to calibrate the appro- priate economic capital.

Description: Description of IAA Risk Adjustment Monograph. The purpose of the monograph is to assist actuaries with the some suggested technical methods in measuring a Risk Adjustment as required for IFRS 17. Examples are given, including translations to confidence interval.

Description: Sustainable operations under changes in accounting principles and solvency standards

Description: This article is dedicated to the non-statutory accounting treatment of common credit risk exposures of life insurers but does not cover all aspects of non-statutory accounting standards. It introduces the concept of and the valuation of credit risks, concerning life insurers.

Description: A Discussion Paper issued by the IASB in May 2007, contains the IASB’s preliminary views on the various recognition and measurement components considered in accounting for insurance contracts and identifies issues that are still under consideration. This article summarized the main proposals in the Paper and emphasizes those issues where the views of the IASB are not uniformly accepted.

Description: This article highlights some key points for IFRS 17 Variable fee approach (VFA) and provides an illustrative example on the measurement model logic.

Description: The article addresses treatment of products with indirect participating features (e.g. declared credited rates) under IFRS 17. Some of the questions that are answered include classification, stochastic modeling requirements, application of the illiquidity premium, methods to systematically allocate between P&L and OCI, and use of locked in discount rates for CSM purposes.