Impacts of IFRS 4 on the Insurance Industry PDF Download
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Author: Tanja Kusterer
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
At present, the IASB is drafting the Financial Reporting Standard IFRS 4 Insurance Contracts with the aim of increasing the comparability and transparency in the accounting for insurance contracts. In June 2013, the Board released a revised exposure draft which is currently under discussion. The final standard is expected to be published in 2015. The following work analyses the impacts of this new standard on the insurance industry. The first part examines the effects on the financial statements and finds that the introduction of a building-block model that is based on a fair value measurement will increase the volatility in profit or loss and equity, lead to accounting mismatches, change the presentation of profit or loss and introduce complexity. As a strategic consequence, insurers may focus on volatility management, adapt their asset and liability management strategies, shift the management systems from a volume- to a profit-oriented perspective, and reconsider their product mix and pricing strategies. The second part discusses the impacts on an insurer's operations and, based on the expected complexity, additional data, an update of processes and systems, a substantial amount of human resources and an extensive education of all stakeholders involved will be required. Altogether, insurers will incur high costs on an initial and ongoing basis which will also depend on the degree of alignment with other regulations.
Author: Tanja Kusterer
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
At present, the IASB is drafting the Financial Reporting Standard IFRS 4 Insurance Contracts with the aim of increasing the comparability and transparency in the accounting for insurance contracts. In June 2013, the Board released a revised exposure draft which is currently under discussion. The final standard is expected to be published in 2015. The following work analyses the impacts of this new standard on the insurance industry. The first part examines the effects on the financial statements and finds that the introduction of a building-block model that is based on a fair value measurement will increase the volatility in profit or loss and equity, lead to accounting mismatches, change the presentation of profit or loss and introduce complexity. As a strategic consequence, insurers may focus on volatility management, adapt their asset and liability management strategies, shift the management systems from a volume- to a profit-oriented perspective, and reconsider their product mix and pricing strategies. The second part discusses the impacts on an insurer's operations and, based on the expected complexity, additional data, an update of processes and systems, a substantial amount of human resources and an extensive education of all stakeholders involved will be required. Altogether, insurers will incur high costs on an initial and ongoing basis which will also depend on the degree of alignment with other regulations.
Author: International Accounting Standards Board
Publisher:
ISBN: 9781904230496
Category : Business insurance
Languages : en
Pages : 46
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Book Description
Author: Michelle Chong-Tai Bell
Publisher:
ISBN: 9789292594121
Category :
Languages : en
Pages :
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Book Description
Author: Thomas Post
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The European insurance industry is currently undergoing a substantial change in financial reporting requirements. Beginning in 2005, compliance with the International Financial Reporting Standards (IFRS) has been required in the European Union. Substantial sections of the IFRS - leading to a market-oriented valuation of insurance contracts - are still under construction and will be introduced in the next few years. To date, assessment of the potential impact of the new IFRS accounting and reporting system is largely found in trade literature, and in insurance industry business leader and expert commentator statements. The tenor of opinion is that the IFRS will create a serious challenge for the European insurance industry. To evaluate the impact of IFRS more scientifically, this paper applies ő where indicated ő capital market theory and the concept of information efficiency. The paper suggests that concerns about the effects of IFRS are exaggerated, and reveals that the main area of IFRS impact on the European insurance industry is likely to be on insurance product design.
Author: Thomas Post
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The European insurance industry is currently undergoing a substantial change in financial reporting requirements. Beginning in 2005, compliance with the International Financial Reporting Standards (IFRS) has been required in the European Union. Substantial sections of the IFRS - leading to a market-oriented valuation of insurance contracts - are still under construction and will be introduced in the next few years. To date, assessment of the potential impact of the new IFRS accounting and reporting system is largely found in trade literature, and in insurance industry business leader and expert commentator statements. The tenor of opinion is that the IFRS will create a serious challenge for the European insurance industry. To evaluate the impact of IFRS more scientifically, this paper applies where indicated capital market theory and the concept of information efficiency. The paper suggests that concerns about the effects of IFRS are exaggerated, and reveals that the main area of IFRS impact on the European insurance industry is likely to be on insurance product design.
Author: Schweizerische Rückversicherungs-Gesellschaft. Economic Research and Consulting
Publisher:
ISBN:
Category : Insurance
Languages : en
Pages : 32
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Book Description
Author: Eric Dal Moro
Publisher:
ISBN:
Category :
Languages : en
Pages : 47
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Book Description
Among the many changes and revolutions that the (re)insurance industry will face in the next few years, introduction of the new standard IFRS 4 phase 2 is one that will certainly impact the way in which the (re)insurance business is managed. Not only will this new standard impact insurance accounting schemes, but it will also impact the performance evaluation of the whole insurance industry in general and each line of business being underwritten by the industry. As a result, some companies may decide to withdraw from some lines of business and/or to concentrate on other lines of business. Given that the final stage of implementation is still years away, it seems that many are not spending the time necessary to consider the timing and stress issues that the (re)insurance industry will face when it comes to implementing the new standard. We suggest that these issues need to be considered soon, since they will most likely result in significant organizational changes involving actuaries, finance, risk modeling and investor relations. This small article highlights some of the major issues that (re)insurance companies will face when coming to implement the new standard and proposes some practical solutions to tackle the most pressing ones.
Author: International Accounting Standards Board
Publisher:
ISBN:
Category : Accounting
Languages : en
Pages : 62
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Book Description
Author: Urska Kosi
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
This study examines the determinants of financial firms' lobbying behaviour in the replacement process of IFRS 4 Insurance Contracts. Based on comment letters to International Accounting Standards Board's (IASB) Exposure Draft 2010/8 we investigate firms' lobbying decisions and their long-term lobbying intensity. Using an international sample of publicly listed financial firms, we show that insurance companies and financially constrained IFRS firms are more likely to lobby the IASB. We also examine the long-term lobbying activity in the IFRS 4 replacement process during the years 2007-2010. We find that insurance companies and firms with dispersed ownership lobby more. Our results are stronger for IFRS firms compared to US-GAAP users. Overall, we document intense lobbying by financial firms, and present results that are largely consistent with economic consequences of anticipated accounting changes being the main driver of firms' lobbying behaviour. These results are in line with prior findings for non-financial firms.
Author: Dorel Mates
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The development of the world trade influences significantly the industry of the insurances, due to the appearance and development of the multinational corporations that consider the world as their private market and they try to place their production operations in the countries that offer economic advantages. In the same time, these corporations request cover in insurances valid across the world, which represents a challenge for the industry of the insurances.In this context, the insurance companies must develop their financial capacity and create administrative agreements in order to protect the major values that are exposed to damages. In the same time it is necessary to develop the set of intermediaries in insurances, of the offices of administration of the damage, as well as of the facilities offered by the reinsurance.
