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Created page with "🎯 '''Introduction.''' This training programme takes you from first principles to a complete understanding of IFRS 17, the international accounting standard for insurance contracts. Each page builds on the last, starting from the most basic notions and adding complexity one step at a time. No prior knowledge of insurance or accounting is assumed. By the end, you will be able to read, interpret, and work with IFRS 17 financial statements with confidence. === Internal..."
 
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🎯 '''Introduction.''' This training programme takes you from first principles to a complete understanding of IFRS 17, the international accounting standard for insurance contracts. Each page builds on the last, starting from the most basic notions and adding complexity one step at a time. No prior knowledge of insurance or accounting is assumed. By the end, you will be able to read, interpret, and work with IFRS 17 financial statements with confidence.
🎯 '''Introduction.''' This training programme takes you from first principles to a complete understanding of IFRS 17, the international accounting standard for insurance contracts. Each page builds on the last, starting from the most basic notions and adding complexity one step at a time. No prior knowledge of insurance or accounting is assumed. By the end, you will be able to read, interpret, and work with IFRS 17 financial statements with confidence.


=== [[Internal:Training/IFRS17/Why insurance exists|Why insurance exists]] ===
==== [[Internal:Training/IFRS17/Why insurance exists|Why insurance exists]] ====
* Uncertainty and risk
* Uncertainty and risk
* Pooling as a solution
* Pooling as a solution
* The role of the insurer
* The role of the insurer


=== [[Internal:Training/IFRS17/The economics of an insurance contract|The economics of an insurance contract]] ===
==== [[Internal:Training/IFRS17/The economics of an insurance contract|The economics of an insurance contract]] ====
* Anatomy of a premium
* Anatomy of a premium
* The timing mismatch and the time value of money
* The timing mismatch and the time value of money
* Where profit comes from
* Where profit comes from


=== [[Internal:Training/IFRS17/What is accounting and why it matters|What is accounting and why it matters]] ===
==== [[Internal:Training/IFRS17/What is accounting and why it matters|What is accounting and why it matters]] ====
* The purpose of accounting: who needs it and why
* The purpose of accounting: who needs it and why
* The balance sheet and the income statement
* The balance sheet and the income statement
* Key principles: recognition, measurement, and matching
* Key principles: recognition, measurement, and matching


=== [[Internal:Training/IFRS17/Accounting for an insurer|Accounting for an insurer]] ===
==== [[Internal:Training/IFRS17/Accounting for an insurer|Accounting for an insurer]] ====
* The insurer's balance sheet: reserves as the dominant liability
* The insurer's balance sheet: reserves as the dominant liability
* The insurer's income statement: premiums, claims, and expenses
* The insurer's income statement: premiums, claims, and expenses
* The hard questions: when is revenue earned, how do you value an uncertain promise?
* The hard questions: when is revenue earned, how do you value an uncertain promise?


=== [[Internal:Training/IFRS17/Why insurance broke global standards|Why insurance broke global standards]] ===
==== [[Internal:Training/IFRS17/Why insurance broke global standards|Why insurance broke global standards]] ====
* Different countries, different answers
* Different countries, different answers
* IFRS and the promise of one global language
* IFRS and the promise of one global language
* IFRS 4 as a temporary compromise and why IFRS 17 was needed
* IFRS 4 as a temporary compromise and why IFRS 17 was needed


=== [[Internal:Training/IFRS17/The building blocks: overview|The building blocks: overview]] ===
==== [[Internal:Training/IFRS17/The building blocks: overview|The building blocks: overview]] ====
* The idea of decomposing a liability into transparent pieces
* The idea of decomposing a liability into transparent pieces
* The four components at a glance: FCF, discounting, RA, CSM
* The four components at a glance: FCF, discounting, RA, CSM
* How the building blocks solve the problems of the old world
* How the building blocks solve the problems of the old world


=== [[Internal:Training/IFRS17/Fulfilment cash flows|Fulfilment cash flows]] ===
==== [[Internal:Training/IFRS17/Fulfilment cash flows|Fulfilment cash flows]] ====
* Which cash flows to include
* Which cash flows to include
* The contract boundary
* The contract boundary
* Probability-weighted estimates and keeping assumptions current
* Probability-weighted estimates and keeping assumptions current


=== [[Internal:Training/IFRS17/Discounting|Discounting]] ===
==== [[Internal:Training/IFRS17/Discounting|Discounting]] ====
* Why discounting is essential for insurance liabilities
* Why discounting is essential for insurance liabilities
* Choosing the discount rate: top-down vs. bottom-up
* Choosing the discount rate: top-down vs. bottom-up
* How discounting affects the liability over time
* How discounting affects the liability over time


=== [[Internal:Training/IFRS17/The risk adjustment|The risk adjustment]] ===
==== [[Internal:Training/IFRS17/The risk adjustment|The risk adjustment]] ====
* What the risk adjustment represents
* What the risk adjustment represents
* How to measure it: confidence levels, cost of capital, VaR
* How to measure it: confidence levels, cost of capital, VaR
* How the risk adjustment releases as risk expires
* How the risk adjustment releases as risk expires


=== [[Internal:Training/IFRS17/The contractual service margin|The contractual service margin]] ===
==== [[Internal:Training/IFRS17/The contractual service margin|The contractual service margin]] ====
* What the CSM represents: unearned profit locked away on day one
* What the CSM represents: unearned profit locked away on day one
* How the CSM absorbs changes in estimates
* How the CSM absorbs changes in estimates
* How the CSM releases into revenue: coverage units
* How the CSM releases into revenue: coverage units


=== [[Internal:Training/IFRS17/Grouping contracts|Grouping contracts]] ===
==== [[Internal:Training/IFRS17/Grouping contracts|Grouping contracts]] ====
* Portfolios: contracts with similar risks
* Portfolios: contracts with similar risks
* Profitability groups: separating profitable from onerous
* Profitability groups: separating profitable from onerous
* Annual cohorts: why contracts issued more than a year apart must be separated
* Annual cohorts: why contracts issued more than a year apart must be separated


=== [[Internal:Training/IFRS17/The general model: initial recognition|The general model: initial recognition]] ===
==== [[Internal:Training/IFRS17/The general model: initial recognition|The general model: initial recognition]] ====
* Day one: measuring the four building blocks
* Day one: measuring the four building blocks
* Profitable contracts: CSM is positive
* Profitable contracts: CSM is positive
* Onerous contracts: CSM is zero, loss recognized immediately
* Onerous contracts: CSM is zero, loss recognized immediately


=== [[Internal:Training/IFRS17/The general model: subsequent measurement|The general model: subsequent measurement]] ===
==== [[Internal:Training/IFRS17/The general model: subsequent measurement|The general model: subsequent measurement]] ====
* Passage of time: unwinding discount, releasing RA, releasing CSM
* Passage of time: unwinding discount, releasing RA, releasing CSM
* Changes in estimates: future service adjusts CSM, current/past service hits P&L
* Changes in estimates: future service adjusts CSM, current/past service hits P&L
* Claims incurred, settled, and derecognition
* Claims incurred, settled, and derecognition


=== [[Internal:Training/IFRS17/The income statement under IFRS 17|The income statement under IFRS 17]] ===
==== [[Internal:Training/IFRS17/The income statement under IFRS 17|The income statement under IFRS 17]] ====
* Insurance revenue: not premiums, but service delivered
* Insurance revenue: not premiums, but service delivered
* Insurance service expenses and the insurance service result
* Insurance service expenses and the insurance service result
* Insurance finance income/expense and the OCI option
* Insurance finance income/expense and the OCI option


=== [[Internal:Training/IFRS17/The premium allocation approach|The premium allocation approach]] ===
==== [[Internal:Training/IFRS17/The premium allocation approach|The premium allocation approach]] ====
* When PAA is available: the eligibility test
* When PAA is available: the eligibility test
* How PAA works: simplified measurement
* How PAA works: simplified measurement
* What you keep and what you skip vs. the general model
* What you keep and what you skip vs. the general model


=== [[Internal:Training/IFRS17/The variable fee approach|The variable fee approach]] ===
==== [[Internal:Training/IFRS17/The variable fee approach|The variable fee approach]] ====
* What are direct participating contracts
* What are direct participating contracts
* The variable fee concept: how VFA modifies the general model
* The variable fee concept: how VFA modifies the general model
* Scope and the three eligibility criteria
* Scope and the three eligibility criteria


=== [[Internal:Training/IFRS17/Reinsurance held|Reinsurance held]] ===
==== [[Internal:Training/IFRS17/Reinsurance held|Reinsurance held]] ====
* Reinsurance as the mirror image: the insurer is the customer
* Reinsurance as the mirror image: the insurer is the customer
* Key asymmetries: day-one gains and loss recovery
* Key asymmetries: day-one gains and loss recovery
* Proportionate vs. non-proportionate reinsurance
* Proportionate vs. non-proportionate reinsurance


=== [[Internal:Training/IFRS17/Contract modifications and portfolio transfers|Contract modifications and portfolio transfers]] ===
==== [[Internal:Training/IFRS17/Contract modifications and portfolio transfers|Contract modifications and portfolio transfers]] ====
* When contract terms change: derecognize or continue?
* When contract terms change: derecognize or continue?
* The criteria and consequences of modification
* The criteria and consequences of modification
* Portfolio transfers: measuring at the transaction date
* Portfolio transfers: measuring at the transaction date


=== [[Internal:Training/IFRS17/Transition to IFRS 17|Transition to IFRS 17]] ===
==== [[Internal:Training/IFRS17/Transition to IFRS 17|Transition to IFRS 17]] ====
* The full retrospective approach: the gold standard
* The full retrospective approach: the gold standard
* The modified retrospective approach: practical approximation
* The modified retrospective approach: practical approximation
* The fair value approach: when history is unavailable
* The fair value approach: when history is unavailable


=== [[Internal:Training/IFRS17/Presentation, disclosure, and interpretation|Presentation, disclosure, and interpretation]] ===
==== [[Internal:Training/IFRS17/Presentation, disclosure, and interpretation|Presentation, disclosure, and interpretation]] ====
* How IFRS 17 numbers appear in published financial statements
* How IFRS 17 numbers appear in published financial statements
* Key disclosure requirements
* Key disclosure requirements

Revision as of 22:02, 31 March 2026

🎯 Introduction. This training programme takes you from first principles to a complete understanding of IFRS 17, the international accounting standard for insurance contracts. Each page builds on the last, starting from the most basic notions and adding complexity one step at a time. No prior knowledge of insurance or accounting is assumed. By the end, you will be able to read, interpret, and work with IFRS 17 financial statements with confidence.

Why insurance exists

  • Uncertainty and risk
  • Pooling as a solution
  • The role of the insurer

The economics of an insurance contract

  • Anatomy of a premium
  • The timing mismatch and the time value of money
  • Where profit comes from

What is accounting and why it matters

  • The purpose of accounting: who needs it and why
  • The balance sheet and the income statement
  • Key principles: recognition, measurement, and matching

Accounting for an insurer

  • The insurer's balance sheet: reserves as the dominant liability
  • The insurer's income statement: premiums, claims, and expenses
  • The hard questions: when is revenue earned, how do you value an uncertain promise?

Why insurance broke global standards

  • Different countries, different answers
  • IFRS and the promise of one global language
  • IFRS 4 as a temporary compromise and why IFRS 17 was needed

The building blocks: overview

  • The idea of decomposing a liability into transparent pieces
  • The four components at a glance: FCF, discounting, RA, CSM
  • How the building blocks solve the problems of the old world

Fulfilment cash flows

  • Which cash flows to include
  • The contract boundary
  • Probability-weighted estimates and keeping assumptions current

Discounting

  • Why discounting is essential for insurance liabilities
  • Choosing the discount rate: top-down vs. bottom-up
  • How discounting affects the liability over time

The risk adjustment

  • What the risk adjustment represents
  • How to measure it: confidence levels, cost of capital, VaR
  • How the risk adjustment releases as risk expires

The contractual service margin

  • What the CSM represents: unearned profit locked away on day one
  • How the CSM absorbs changes in estimates
  • How the CSM releases into revenue: coverage units

Grouping contracts

  • Portfolios: contracts with similar risks
  • Profitability groups: separating profitable from onerous
  • Annual cohorts: why contracts issued more than a year apart must be separated

The general model: initial recognition

  • Day one: measuring the four building blocks
  • Profitable contracts: CSM is positive
  • Onerous contracts: CSM is zero, loss recognized immediately

The general model: subsequent measurement

  • Passage of time: unwinding discount, releasing RA, releasing CSM
  • Changes in estimates: future service adjusts CSM, current/past service hits P&L
  • Claims incurred, settled, and derecognition

The income statement under IFRS 17

  • Insurance revenue: not premiums, but service delivered
  • Insurance service expenses and the insurance service result
  • Insurance finance income/expense and the OCI option

The premium allocation approach

  • When PAA is available: the eligibility test
  • How PAA works: simplified measurement
  • What you keep and what you skip vs. the general model

The variable fee approach

  • What are direct participating contracts
  • The variable fee concept: how VFA modifies the general model
  • Scope and the three eligibility criteria

Reinsurance held

  • Reinsurance as the mirror image: the insurer is the customer
  • Key asymmetries: day-one gains and loss recovery
  • Proportionate vs. non-proportionate reinsurance

Contract modifications and portfolio transfers

  • When contract terms change: derecognize or continue?
  • The criteria and consequences of modification
  • Portfolio transfers: measuring at the transaction date

Transition to IFRS 17

  • The full retrospective approach: the gold standard
  • The modified retrospective approach: practical approximation
  • The fair value approach: when history is unavailable

Presentation, disclosure, and interpretation

  • How IFRS 17 numbers appear in published financial statements
  • Key disclosure requirements
  • Reading IFRS 17 reports as an analyst or stakeholder
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