EIOPA analyses impact of IFRS 17 in insurance sector

Posted on April 21, 2024 by Editor

The European Insurance and Occupational Pensions Authority (EIOPA) recently released a report examining the implementation of the new insurance accounting standard, IFRS 17, in the EU. The report evaluates the adoption of IFRS 17 by insurance undertakings and compares the calculation of insurance liabilities under IFRS 17 with the Solvency II framework.

Since its implementation in January 2023, IFRS 17 has brought significant changes to the valuation of insurance liabilities – overall leading to an increase in insurance liabilities and a corresponding decrease in shareholders’ equity.

The study reveals that insurers have utilised all three transition approaches offered by IFRS 17 to a similar extent, with differences observed in valuation methods based on the type of insurance contract. Despite similarities, IFRS 17 and Solvency II differ in several aspects, including valuation methods, discount rates, and risk adjustments.

EIOPA’s analysis provides valuable insights for regulators, insurers, and stakeholders navigating the evolving landscape of insurance risk measurement, reporting and disclosure.

For further details, you can access the full report and factsheet on EIOPA’s website.

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