Case Studies
Impact assessment of IFRS 17 GMM and PAA approach- Case Study
A large Irish insurer approached Infigos’s team to perform an impact assessment of IFRS 17 for some of their life and short-term insurance products. The main aim was to compare the calculation requirements and results of IFRS 4 and IFRS 17, under both the General Model and Premium Allocation approaches.
A decision was made to do the impact assessment for four products, two life and two short-term. The products were chosen for their different properties so that as many of the different factors that could impact results as possible could be captured in the assessment.
Completed IFRS 17 financials and disclosures - Case Study
Insurers are currently faced with a new accounting standard, IFRS 17, which they must implement for financial periods beginning on or after 1 January 2023. A retail South African insurer began its compliance journey a few years ago and enlisted Infigos to assist in meeting this compliance deadline.
Complete Illustration of GMM Approach- Case Study
The standard model, as defined by IFRS 17, of measuring the value of insurance contracts is the GMM approach also called ‘building blocks approach’. In this approach, the value of the contract is measured as the sum of the following components:
- Sum of the future cash flows that relate directly to the fulfilment of the contractual obligations.
- Time value of the future cash flows. The discount rates used to determine the time value reflect the characteristics of the insurance contract.
- Risk adjustment, representing the compensation that the insurer requires for bearing the uncertainty in the amount and timing of the cash flows.
- Contractual service margin (CSM), representing the amount available for overhead and profit on the insurance contract. The purpose of the CSM is to prevent a gain at initiation of the contract.
Complete Illustration of PAA Approach- Case Study
The premium allocation approach is a simplified form of measuring insurance contracts in comparison with the general model. Use of the premium allocation approach is optional for each group of insurance contracts that meets the eligibility criteria at the inception of the group:
- The entity reasonably expects that this will be a reasonable approximation of the General Model, or
- The coverage period of each contract in the group is one year or less.
IFRS 17 Implementation Process and Success factors of Non-life Insurer in US- Case Study
This case study focuses on a US based insurance company engaged in the non-life insurance sector. Products include fire, marine, automobile, personal pension, long-term insurance, etc. It gives details of the following:
- Road map of IFRS 17 implementation project
- Implementation steps and the progress of the project
- The challenges faced during the project
- Success factor of the IFRS 17 implementation project:
