Last week the International Accounting Standards Board (IASB) issued the International Financial Reporting Standard (IFRS) for insurance contracts, IFRS 17, which will come into force in 2021 although companies can apply it earlier. IFRS 17 Insurance Contracts is “the first truly international and comprehensive IFRS Standard for insurance contracts” and will require all insurance contracts to be accounted for in a consistent manner, replacing today’s multitude of different approaches and providing investors with better information so they can make comparisons between companies. The IASB said the new insurance contract standards, which will replace IFRS 4, will “help investors and others better understand insurers’ risk exposure, profitability and financial position”.

This new global accounting standard, which will replace the national standards for insurance contracts that were used under IFRS 4, will affect the actuarial and financial reporting processes in insurance companies but corporate treasurers in other industries will not see much impact from IFRS 17. This video features IASB Chairman Hans Hoogervorst explaining why IFRS 17 is needed:

IASB Chairman Hans Hoogervorst discusses IFRS 17 Insurance Contracts