Blog posts

Onerous contracts IFRS 17

A positive CSM is released to the income statement over the coverage period.

What about groups of insurance contracts that are onerous, and therefore expected to be loss-making?

In this post, we will consider three cases:

  1. Contracts with reduced CSM
  2. Initially onerous contracts
  3. Contracts that become onerous

Contracts with …

Measuring Contractual Service Margin IFRS 17

In this post, let's take a look at the initial and subsequent accounting for the Contractual Service Margin (CSM). We will focus on products without direct participating features.

Initial recognition

Let's take an example of a contract with a 3-year coverage period without any investment component.

The policyholder pays …

Fulfilment cash flows IFRS 17

IFRS 17 has introduced the concept of fulfilment cash flows. Fulfilment cash flows are the building blocks of the general model.

Fulfilment cash flows consist of inflows and outflows, discounting and an explicit risk adjustment for non-financial risk. What remains after this calculation (if anything) is the CSM.

Fulfilment cash flows (inflows, outflows, discounting, risk adjustment) and contractual service margin.

Let's take …

Help needed - please support an open-source initiative!

You may already know cashflower — a Python package for cash flow modelling.

cashflower is already working well with example models, but we want to take it further. The next big step in its development is testing it with real-world insurance models and their complexities.

This is where we need …

Statistical distributions

Understanding statistical distributions is key when working with data, as they help describe how values behave in a dataset. Different distributions are useful for modelling different types of real-world scenarios. This guide provides a brief overview of some of the most commonly used statistical distributions, along with their key properties …