IFRS 17

IFRS 17 explained

IFRS 17 was issued by the International Accounting Standards Board and is effective for annual periods beginning on or after 1 January 2023. It replaced IFRS 4 and sets out a single, consistent way to account for insurance contracts.

Under IFRS 17, an insurer measures groups of contracts using estimates of future cash flows, an adjustment for the time value of money, an adjustment for risk, and a contractual service margin that represents unearned profit released over the life of the contracts. Long-term life business is affected significantly because contracts run for many years.

Applying the standard needs detailed, policy-level data on premiums, claims, expenses and contract terms, which is why it is as much a data challenge as an accounting one.

Why it matters in life insurance

Zambia applies International Financial Reporting Standards, so life insurers preparing IFRS financial statements need IFRS 17-compliant measurement and disclosures. Ontech LifeI ERP keeps the contract-level data IFRS 17 measurement depends on and includes IFRS 17 reporting alongside its general ledger.

Related terms

PIA (Pensions and Insurance Authority) · Annuity · Claims ratio