Date(s) - 07/12/2021 - 10/12/2021
10:30 am - 1:30 pm
Registrations are available to the first 15 participants and close on the 5th December.
This insurance course is designed to give you a detailed insight into this new standard and implementation challenges involved.
This new standard IFRS 17 shall become effective from 1 January 2023, therefore, the countdown for implementation has started.
With the introduction of IFRS 17, the actuarial involvement has significantly deepened and broadened in the industry. It is clear now that the actuarial input is absolutely essential to assure both the technical correctness and clarity of the approach proposed in the accounting standard.
The actuarial teams shall now need to implement a new valuation basis requiring changes to the actuarial model, data, methodologies, contract boundaries and also areas which were previously not the responsibilities of actuaries (such as the calculation of revenue and CSM will also rely on probability-based assessment) may now fall to the responsibility of actuaries. The actuaries now need to have more close coordination with the finance teams.
IFRS 17 Insurance Contracts will require a close cooperation between accountants and actuaries, much more than other accounting standards applied so far. This course will focus on the actuarial work to be done for IFRS 17, providing the necessary context as well as the specific treatment of active and passive reinsurance.
The implementation of IFRS 17 will be a major challenge to insurers and investors, fundamentally changing accounting and reporting practices. This course shall will help actuaries in understanding and debating a clear roadmap for implementing the IFRS 17 and how far the actuarial model needs to be modified and redesigned.
- Day 1: Tuesday 7th December 2021 from 10:30 am to 1:30 pm UK time
- Day 2: Wednesday 8th December 2021 from 10:30 am to 1:30 pm UK time
- Day 3: Thursday 9th December 2021 from 10:30 am to 1:30 pm UK time
- Day 4: Friday 10th December 2021 from 10:30 am to 1:30 pm UK time
- Zoom live training. Plus, materials and example Excel sheets.
Agenda (over 4 days):
Session 1: Introduction and scope of IFRS 17
- Key principles
- Contracts in scope
- Grouping of contracts
Session 2: The general accounting model
- Fulfilment cash flows and their estimation
- Risk adjustment
- Contractual service margin
- Onerous contracts and loss component
- Initial recognition
- Subsequent measurements and changes
- Separating components
Session 3: Modelling challenges
- Modelling cash flow projections
- Best estimate assumptions
- Stochastic vs deterministic approaches
- Differences to Solvency II cash flows
- Risk adjustment: quantification and amortization pattern
- Differences to Solvency II risk margin
Session 4: Presentation and disclosure
- Statement of position
- Statement of income or expense
- Statement of cash flows
- Disclosure requirements and reconciliations
Session 5: Other Approaches
- Premium allocation approach
- Variable fee approach
- How to execute
Session 6: Reinsurance contracts
- Accounting for reinsurance contracts
- Effect of reinsurance
- Difference to insurance contracts
Session 7: Required processes and inputs
- Actuarial processes required
- Relation to risk processes
- Accounting systems
Session 8: Contracts with participation features and transition
Benefits of attendance:
- The programme shall cover all the actuarial aspects of IFRS 17 and the overall implementation challenges and best solutions.
- In-depth understanding of the Building Blocks Approach (BBA), Premium Allocation Approach (PAA) and Variable Fees Approach (VFA) under IFRS 17.
- Impact on Actuarial Modelling.
- Risk adjustment and deferral of up-front profits through the Contractual Service Margin (CSM).
- How the risk adjustment should be calculated to reflect management’s appetite for risk over the run-off of the claims reserves.
- The extent to which the illiquidity of cash flows should consider in the discount rates.
- Impact on the various types of contracts.
- Understand how claims’ reserves and insurance liabilities would be impacted.
- Overview of financial reporting requirements for insurers.
- Highlighting some common pitfalls to avoid.
- Detailed worked examples and case studies will be integrated into the course to reinforce key points.
- How to present insurance contracts.
- Better understanding of drivers of income statement volatility and insurance liabilities.
- Enhanced processes and controls for insurance contracts and related liabilities
Who should attend?
- This course is designed for those who wish to learn about the new IFRS 17 accounting standard and are likely to be involved with its implementation at some stage, particularly relating to its probabilistic elements.
- It will be highly relevant to finance, risk and actuarial team members preparing for the changes in insurance contract accounting practice.
- The course is designed for executive officers, industry controllers, analysts, actuaries, auditors and finance professionals who wish to gain a working knowledge of this large new standard.
- An awareness of basic accounting principles applied by any national set of standards.
- Some knowledge about roles of actuaries.
- No other advance preparation is required for this course.
Information to be provided