In their latest board meeting on Wednesday 23rd January, The IASB announced some changes to the IFRS 17 standard.
The insurance industry is likely to welcome these changes, as they provide clarity, and the standard will now give accounting outcomes that better match business reality in the areas of acquisition costs, CSM release and reinsurance.
IFRS 17 project teams may be concerned that these impacts will effect the data and systems designs of their solutions. At Legerity, we have already considered the impacts and our configuration design will update flexibly to manage these changes.
Focussing on the change in initial recognition for reinsurance in particular, where underlying contracts are onerous, our integrated CSM engine and sub-ledger provide a powerful tool for linking underlying and reinsurance CSM calculations to accurately calculate the P&L impacts.