International Accounting Rules Explained

These days international insurers are spending a lot of time focusing on a significant accounting change, best known by its abbreviation, IFRS17.

IFRS 17 – International Financial Reporting Standard 17 – is an accounting rule scheduled to take effect in 2021. It is designed to bring more clarity to insurance financial statements. It affects most insurers that operate internationally; US-only insurers conform to generally accepted accounting principles (GAAP) or statutory accounting principles, or both.

Life insurers will be affected much more than property/casualty insurers.

Not all insurers embrace the standard enthusiastically, as noted in this Financial Times article (subscription required)

Here’s a cartoon by I.I.I. member Allianz that explains it in general terms:

For more detail, I.I.I. associate member Deloitte has this page of information.

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