The Key Role of Actuaries in Steering IFRS 17 KPIs
The international IFRS 17 standard will have a major impact on the valuation and accounting of insurance contracts and therefore on the profit signature of insurance companies.Actuaries have a central role in new standard implementation. They are strongly involved in topics such as transition, financial impact assessments, measurement of risk adjustment as well as valuation of future cash flows and contractual service margin. Through the selection of options offered by IFRS 17, the determination of actuarial methodologies and the use of expert judgment in many areas, actuaries are heavily involved in the performance and KPIs outlook of insurance companies in the new world. We present in this paper how decisions taken by actuaries can influence the insurance financial reporting metrics, with a focus on the expert judgment required in several parts of the IFRS 17 liabilities valuation process. This analysis is enriched by an international benchmark showing the diversity of practices and bringing key considerations regarding the role of actuaries within the IFRS 17 framework.