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IFRS_17 reporting

Subsequent Measurement IFRS 17

Last update: 2022-03-25 | Created: 2022-03-25

In this post, let's analyze the change in fulfilment cash flows over time and how these changes are reflected in the measurement of the insurance contract.

IFRS 17 specifies different treatments for changes in fulfilment cash flows, depending on whether the change relates to future service or past and current service. Changes in fulfilment cash flows due to unwinding of the discounting are presented as net insurance finance expense.

So, we have three cases:

  • changes in fulfilment cash flows that relate to future service,
  • changes in fulfilment cash flows that relate to past or current service,
  • changes in the time …
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reporting

Embedded Value

Last update: 2022-02-04 | Created: 2022-02-04

If you are an actuary, it is likely that you will come across the term Embedded Value (EV). Embedded Value is one of the reporting regimes - the set of rules of how to perform actuarial modelling and reporting.

In this post, we will present a short history of Embedded Value, its aim and main components. Before we start, it is worth mentioning that Embedded Value is not required by any regulators. The insurance companies are not obliged to publish results of EV (unlike for example Solvency II). …

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Actuarial risks

Last update: 2022-01-22 | Created: 2022-01-22

An actuary can be perceived as a superhero who helps protecting policyholders against risks. In this post, we will go over the risks that insurance companies face.

The main risks groups are: insurance, market and operational risks.

Insurance risks

Insurance risks are the risks bonded to leading an insurance business. The most important insurance risks are underwriting risks.

  • Mortality risk - the risk that more policyholders die than expected (when death is the insured event). The risk may materialise e.g. due to incorrect assumptions used in the model.
  • Longevity risk - the risk …
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Proxy model for actuarial valuation

Last update: 2022-01-15 | Created: 2022-01-15

A proxy model is the simplification of the full valuation model. It should be as close as possible to the full results. The proxy model is faster than the full model.

Application

The proxy model is likely to be used when the company has its own Internal Model and uses it instead of the Standard Formula. In that case, the company needs much more valuation results. For example, the company might need results for stresses on levels other than 1-in-200, stresses on pairs of risks, etc.

The proxy model might vary depending on the number of risks that it encompasses: …

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