IFRS 17 Accounting Standards for Insurance

IFRS 17 Final Standard Released

On May 18, 2017 the International Accounting Standards Board (IASB) published the final draft of the IFRS 17 accounting standard, along with several supporting documents of guidance and illustration. This new accounting framework will impact the insurance industry around the world and will become effective for the 2021 reporting year.

All of our AXIS clients in Canada, Europe and many in Asia Pacific will be impacted by IFRS 17 along with select US clients with parent companies or subsidiaries based outside the US. We have been following the developments in this project since its inception, anticipating the additional functionality that will be required to satisfy the standard. Since the release of the final standard, we have been assessing the full impact of its implementation on our clients to determine not only how AXIS will need to be further enhanced but also what other components are needed for a full IFRS solution for insurers.

RiskIntegrity IFRS 17

Moody's Analytics announced the official launch of the RiskIntegrity IFRS 17 product on April 9, 2017. RiskIntegrity IFRS 17 fills a vital role in the overall solution for IFRS 17 reporting needs faced by insurers globally. It supplements AXIS (and potentially other sources of actuarial components) with an IFRS 17 engine, an advanced analytics module and an IFRS 17 sub-ledger to feed your existing general ledger and enable an efficient end-to-end financial reporting process under the new standard.

How will Moody's Analytics support IFRS 17 and 9?

The IFRS 17 standard applies a principles-based approach which will require interpretation and which contemplates optional approaches. Practice may evolve differently in different markets. We are developing full support for the new requirements, with much of the functionality required in AXIS already available.

Together, AXIS and RiskIntegrity IFRS 17 will support:

  • The application of IFRS 17 and IFRS 9 to life insurance, annuity and disability products for both the calculation of current date accounting liabilities and the projection of those liabilities over future periods
  • The application of IFRS 9 for both the calculation of current date asset values corresponding to investments held by life insurers, and the projection of those asset values over future periods
  • The derivation of appropriate amounts of revenue, profit or loss, and other comprehensive income for the current reporting period and for projecting future financial statements reflecting IFRS 17 and IFRS 9
  • Analytics and disclosures relating to the above calculations as may be required for public or management reporting

What is the timetable for IFRS 17 support in AXIS?

AXIS has existing structural and functional strengths that can be leveraged as we expand our offering to support full IFRS functionality. Preparatory systems development work has been underway for several years, with various components already completed. Specific support for calculating new elements of IFRS 17, including the CSM roll-forward, was introduced in the current releases of AXIS under beta feature code control in late 2017 and extended in early 2018. Refer to the AXIS Client Webinars and the other AXIS related resources in the menus on this page for more details.

We are committed to addressing client needs for IFRS 17 in a responsive and collaborative manner. Given the effective date of January 2021 for the IFRS 17 standard, we anticipate clients will want substantial delivery of AXIS functionality by the end of 2018. We are working diligently to meet those expectations and will continue to provide further information on specific technical issues in the near future.

Representatives of Moody's Analytics are actively engaged in a number of industry forums on IFRS including direct interaction with the IASB, the consulting firms, and participation in various Working Groups (eg. Canadian Institute of Actuaries and the Canadian Life and Health Insurance Association). These ongoing interactions will keep us abreast of the industry's evolving interpretation of the IFRS 9 and IFRS 17 standards and their implications for insurers.

Further technical discussions relating to the detailed implications of IFRS 17 and how Moody's Analytics is addressing its challenges will continue to be developed and communicated to all of our clients.