IFRS 17 – Challenges in the Derivation of the Risk Adjustment and its Confidence Level
Under IFRS 17, the Risk Adjustment is intended to measure the compensation that the entity requires for bearing the uncertainty associated with the amount and timing of the cash flows that arises from non-financial risk. The IFRS 17 Risk Adjustment creates challenges for both life and P&C (re)insurers such as how to estimate it and how to determine the confidence level needed for disclosure purposes.
This web session will first provide a presentation of the challenges related to the derivation of the Risk Adjustment and the fulfilment of the key IFRS 17 requirements related to its calculation. This will be followed by a discussion about the need for a proper confidence level disclosure methodology. The presentation will then provide an overview of methodological solutions and will include applications for both life and P&C companies.