The International Accounting Standards Board’s (IASB) insurance contracts standard, IFRS 17, will include the option to use a ‘simplified’ accounting model for certain eligible contracts. This model, called the Premium Allocation Approach (PAA), is expected to be widely used by property and casualty (P&C) insurers.
The PAA is intended to be simpler to apply than the standard’s general measurement model and may appear similar to current non-life accounting in some jurisdictions. However, while it might seem at first that little is changing, a look below the surface reveals a number of challenges arising for insurers expecting to apply the PAA.
In the fourth of our webcast series – Property and Casualty insurers prepare to report under IFRS 17 - we will explore how the PAA works in practice and consider some of the financial implications by going through a few illustrative examples.
Following this webcast, participants will be able to explain:
— the high level financial implications of applying the PAA
— key challenges associated with operationalizing the PAA, including evaluating a contract’s eligibility for the PAA