IFRS 17 : Benchmark des assureurs européens. Quels impacts en pratique ?

Abstract

On the 18th May 2017, after many years of debate and work, the IASB published IFRS 17, which covers insurance contracts. This standard was planned to go into application on 1st January 2021. This lengthy period of time between publication and application was further increased: The implementation of the standard required complex developments within a unreasonably constrained time. As a result, the IASB has decided to postpone the effective date to 1st January 2023, which is for two additional years. IFRS 17 will replace the current IFRS 4 standard, which allows insurance companies to continue to use their local accounting standards. The new IFRS 17 standard on insurance contracts fundamentally changes the principles of evaluation, presentation and accounting of insurance contracts compared to IFRS 4. The objective of IFRS 17 is to eliminate the various accounting practices permitted today and to propose a model that reflects the economic reality of insurance contracts. For this purpose, insurance liabilities will be valued at present value on the basis of assumptions specific to the insurance company. Insurance liabilities will incorporate a risk adjustment to assess the effect of uncertainty. No gain can be recognized as a result of a subscription (the concept of pure contractual service margin). The future standard on insurance contracts provides for 4 accounting models, three of which are derived from the building block approach. The choice of presentation of the income statement reflects the objective of harmonizing the presentation of the profit and loss account of insurance activities with that of other business sectors. Income from insurance contracts will be recognized when they are acquired or when they occur. Insurance premiums will no longer be presented in the income statement but will be the subject of information in the appendix. The volatility of insurance companies' results will depend on the options selected under IFRS 9 and the valuation model applicable according to IFRS 17. As of the date of first application, IFRS 17 must be recognized retrospectively unless this is not possible. In this case, the insurer must apply a retrospective "modified" approach or a so-called "fair value" approach. The main challenge for insurers is to capitalise on the accounting and actuarial tools developed within the framework of projects carried out so far, and Solvency II: the challenge will be to re-use existing tools, systems and processes as much as possible.