For most countries around the world, International Financial Reporting Standards 17 (IFRS 17) became effective on 1 January 2023. For this disclosure report, we have examined IFRS 17 disclosures for year-end 2025 from select global and domestic insurance companies with substantial operations in Asia, emphasising the underlying methodologies and key financial results, including base case performance and sensitivity disclosures to various risks.
IFRS 17 requires an assessment of the profitability of insurance contracts when they are first issued. If they are determined to be positive, the profit over the lifetime of the contracts should be recognised in a manner that reflects the timing of the insurance services the insurer provides. The new accounting framework for insurance contracts includes main features such as fair value measurement of future expected cash flows, contractual service margin, onerous contracts, and presentation of results.
Key questions addressed in the full report include the following:
- What are the key commonalities and differences in IFRS 17 methodology among the companies considered in the scope of the analysis?
- How does IFRS 17 impact the comprehensive equity as of year-end 2024 and year-end 2025, and how does this compare against embedded values?
- What is the impact of IFRS 17 on companies’ profitability, including IFRS 17 net profit and non-GAAP operating profit metrics?
- What are the key drivers impacting IFRS 17 profitability, how do they compare across companies, and how have they evolved?
- How does new business value creation look under IFRS 17, and how does this compare against a traditional embedded-value new business creation metric at year-end 2024 and year-end 2025?
- What are the key drivers impacting companies’ new business value creation under IFRS 17?