Insurance accounting shake-up puts risk centre stage

IFRS 17 will create a closer link between insurers' risk management and P&L volatility

The new International Financial Reporting Standard for insurance contract accounting, known as IFRS 17, rewrites the rules for insurers on measuring contracts and recognising profits, putting risk at the centre of the process.

The standard introduces a risk-adjustment measure when valuing liabilities for financial reporting, and requires the identification and separate accounting of embedded derivatives, as well as the disclosure of insurance and financial risks that arise from contracts