European Insurers' IFRS 9 Benchmark Study

The new standard IFRS 9 on financial instruments has been effective starting 1st January 2018 for most entities but insurance groups have the possibility to defer its application to 2021, the year when the new standard IFRS 17 on insurance contracts will enter into force.

IFRS 9 introduces numerous changes (Phase 1/ classification, Phase 2/ impairment, Phase 3/ hedge accounting, disclosures) and its implementation is complex.

We chose to study the 2017 year-end financial reports of 16 European insurance and reinsurance Groups with the aim of identifying trends, progress and the impact they expect on their financial statements when first applying IFRS 9, and sources of these impacts.

Our Sample

We also had a look at a sample of European bank insurers to see whether they are planning to defer the application of IFRS 9 for their insurance activities.

Nr 2 Benchmark Reinsurers Infographis- 01

Our Findings regarding (re)insurers

Impact of Different Phases

We have also analysed the expected IFRS 9 impacts by phases that (re)insurers had opted for deferral to 2021. Among the 5 groups distinguishing between the impacts of different phases* of IFRS 9, the main findings are as follows:

*Phase 1 of the standard introduced new requirements for the classification and measurement of financial instruments;

Phase 2 of the standard introduced new impairment principles;

Phase 3 of the standard introduced new rules for hedge accounting.

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European Insurers' IFRS 9 Benchmark Study

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Maxime Simoen Partner Paris

Detailed profile

Benchmark on Reinsurers’ Financial Communication

Reinsurance, also known as the “ insurers’ insurance ”, plays a key role in the global market economy today. Several factors, such as the strengthening of capital requirements, the increasing level of significant NAT CAT events or the need for optimal coverage is increasing the need for reinsurance.

Conversion to international accounting standards

With the prevailing trend towards bringing the accounting in consolidated and separate financial statements into line, transitioning to IAS/IFRS is growing in importance. To enhance the clarity and efficiency of reporting, many companies are also opting to adapt their internal accounting to the principles of external financial reporting in accordance with IFRS.