ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

IFRS17 and the Impact on Insurance Industry

Updated on April 19, 2018

Unifying Insurance

America is one country that follows its own standards for accounting, their standards are called Generally Accepted Accounting Principles. However, most of the world follows standards that are set by the IASB, International Accounting Standards Board. This board issues IFRS, International Financial Reporting Standards. These standards are what govern the way financial statements are put together and released in other countries. This helps to create consistency and relevant information to investors and analysts. They are more able to company different companies in different countries because of IFRS. As of May 18th, 2017, the IASB released IFRS 17, this report addressed the one business industry that has been able to get away with essentially doing what they want with their books, the insurance industry.

IFRS 17 targets and seeks to declutter the insurance industry and unify how they report their assets, liabilities and earnings. This new accounting standard must be implemented by all insurance companies that follow IASB accounting standards by 2021. The IASB has also stated that companies are able to adopt the new standard before the effective date on January 1st, 2021 (Wolfe).

One of the big reasons that the insurance industry is getting some new rules is because it is historically one industry that most people struggle to understand. There isn’t very much consistency from one country to another. In The Economist it was stated that the same financial results were looked at under two different country’s standards and the differences were nothing short of shocking. “Revenues on the two reports differed by a quarter and net income by nearly two-fifths” (The Economist). This can be a problem for investors that are interested in the insurance market, but it also makes it very difficult for analyst to get a true reading of how the company is actually doing. When the CPA Journal spoke to IASB member Darrel Scott on the IFRS 17 matter he stated, “You’re going to have consistent accounting for an industry historically seen as difficult to understand, difficult to compare, and difficult to set up against other investment opportunities” (CPA Journal).

When diving deeper into what this new accounting standard is we find that it replaces the preexisting IFRS 4. IFRS 4 was created to limit changes to already existing accounting principles for the insurance industry. This was also implemented in 2004, which is over ten years ago (Wolfe). Ultimately IFRS 4 is what created the need for IFRS 17 because it allowed insurers to use the accounting policies that they wanted to use in order to measure insurance contracts that were similar (Wolfe).

There hasn’t been very much acceptance of IFRS 17 by the insurance industry. There are roughly 450 or more insurance companies that will need to adopt the new protocol within the next three years. While there is word that the companies and their shareholders will end up with a big payday when all is said and done, many are unsure. When speaking to The Economist, Tom Stoddard of Aviva, a British insurance company, stated that he doesn’t think “that any windfall for his firm or its shareholders will be as big as advertised” and that “the costs will outweigh the benefits” (The Economist). Francesco Nagari of Deloitte explained how this was something that has never been done before with IFRS, they are attempting to make one big jump in an industry that hasn’t had much regulation in the past. They expect everyone to go from whatever they are currently using and update it to match what they want to see (The Economist).

Ultimately the implementation of IFRS 17 includes a uniform use of current discount rates and the insurance companies must also consolidate their balance sheets. The discount rate change seems like it will be the more difficult of the changes because some countries have been using the historical discount rates when they issued policies. The Economist also reported that “The standard also requires profits to be smoothed out over time rather than accounted for at once, and clearly distinguishes between underwriting profits and investment returns” (The Economist).

Overall, I think that IFRS 17 will help a lot of people understand the insurance industry around the world. I’m curious to see how long it takes some companies to implement the new guidelines and if there are some companies that try to get around adopting them. I think there is also a slight concern growing and anticipation to see just what these new balance sheets and updated rates will tell us about different companies and the industry all together.

Works Cited

“After Two Decades, Standard on Insurance Accounting Released.” The CPA Journal, vol. 87, no. 6, 2017, p. 21.

“Insurers Get a New Global Accounting Regime.” The Economist, The Economist Newspaper, 18 May 2017,

Wolfe, Anslee. “New IASB Standard Aims for Consistent Accounting for Insurers.”Journal of Accountancy, 18 May 2017,


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)