Analysis of the IFRS 17 accounting treatment of the main insurance products on the Belgian market

Abstract

On March 17, 2020, the IASB announced that the effective date of IFRS 17 - insurance contracts was postponed to annual reporting periods beginning on or after January 1, 2023. This delay allows companies within the scope of IFRS 17 more time to put in place all the resourced required to implement IFRS 17. However, this new standard changes radically the accounting treatment of insurance contracts. Indeed, IFRS 17 challenges the accounting treatment of insurance contracts by providing different measurement models depending on the characteristics of the contract. Insurance companies which are the most affected by this standard are therefore making every effort to be ready by January 1, 2023. Since 2012, non-listed Belgian insurance and reinsurance companies have to publish their consolidated financial statements under IFRS standards which enlarged the number of companies in Belgium under the scope IFRS standards. Therefore, insurance companies active in this market are assessing the accounting treatment of their products under IFRS 17. The aim of this paper is to produce an analysis of the IFRS 17 accounting treatment of the main insurance products on the Belgian market. As Belgian insurance companies are still implementing IFRS 17, identifying what challenges they are facing and how they interpret this standard so far on their insurance products is relevant for anyone who wants to have an idea of the impact of IFRS 17 on the Belgium market. In order to do so, a qualitive research collecting opinions from Belgian insurers has been conducted. The first chapter of this paper contains a brief summary of IFRS 17 and identifies what the main elements under IFRS 17 are, and how these may influence the accounting treatment of Belgian insurance products. Secondly, the methodology of this research is clearly defined by selecting insurance companies and their main insurance products. The third chapter includes a catalogue of products which details each product selected for the research. Finally, data collected from the respondents is gathered and interpreted. It resulted that amongst the insurance products analysed, few have a main accounting treatment under IFRS 17 on the Belgium market. Indeed, out of 11 insurance products analysed, only 4 present an identical accounting treatment.