Disclosure for Insurance contracts

Disclosure for Insurance contracts – The disclosure requirements in IFRS 17 aim to provide users of the financial statements with a basis to assess the effect that contracts within the scope of IFRS 17 have on an entity’s financial position, financial performance and cash flows. Disclosure for Insurance contracts Disclosure for Insurance contracts  Disclosure for Insurance contracts

IFRS 17 requires disclosure of qualitative and quantitative information about [IFRS 17 93]: Disclosure for Insurance contractsDisclosure for Insurance contracts

If these specific disclosures are insufficient to meet this objective, then an entity discloses additional information [IFRS 17 94].

Level at which to disclose information

Entities consider the level of detail that is necessary to satisfy the general disclosure objective and how much emphasis to place on each of the disclosure requirements. The usefulness of the information cannot be obscured by either the inclusion of a large amount of insignificant detail or the aggregation of items that have different characteristics [IFRS 17 94-95].

The standard does not specify the level of aggregation an entity should apply when making disclosures, although it gives the following examples of aggregation bases that might be appropriate for information disclosed about insurance contracts [IFRS 17 96]: Disclosure for Insurance contracts

  • Type of contract (e.g., major product lines) Disclosure for Insurance contracts
  • Geographical area (e.g., country or region) Disclosure for Insurance contracts
  • The reportable segment, as defined in IFRS 8 Operating Segments Disclosure for Insurance contracts


The disclosure requirements of IFRS 17 are more extensive compared with those in IFRS 4. They comprise 40 paragraphs of the standard. Insurance entities have not applied many of these disclosures in the past, so complying with the disclosure requirements will be a challenge for data, systems, and processes.

Entities need to apply judgment in how, or even whether, they break down the required disclosures into separate lines of business or geographical areas. Entities may find minimum disclosure attractive when they first implement IFRS 17 because of uncertainty about the effort or even feasibility of providing separate disclosures in time for initial application in 2021.

Disclosure recognised insurance amountsDisclosure for Insurance contracts

An entity is required to disclose the following: Disclosure for Insurance contracts

  • Reconciliations that show how the net carrying amount of contracts within the scope of IFRS 17 changed during each period
  • Disclosures for contracts other than those to which the entity applies the premium allocation approach:
    • Analysis of insurance revenue recognized in the period for contracts Disclosure for Insurance contracts
    • Analysis of the effect of contracts initially recognized in each period Disclosure for Insurance contracts
    • Explanation of when the entity expects to recognize the contractual service margin (CSM) at the end of the reporting period in profit or loss
  • Information about contracts to which the entity applies the premium allocation approach
  • An explanation of the total amount of insurance finance income or expenses in the reporting period
  • Disclosures that help users of financial statements understand the effect on the CSM and revenue, in each subsequent period, of groups of contracts measured at the transition date, applying the modified retrospective approach or the fair value approach. Disclosure recognised insurance amounts
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Disclosure of significant judgments for insurances

Consistent with IAS 1, IFRS 17 requires disclosure of significant judgment and changes in judgment that an entity makes in applying the standard [IFRS 17 93 and IAS 1 122]. Specifically, an entity must disclose the inputs, assumptions and estimation techniques it has used, including [IFRS 17 117]:

  • Methods to measure insurance contracts within the scope of IFRS 17 and processes to estimate the inputs to those methods. Unless impracticable, an entity must also provide quantitative information about those inputs. Disclosure for Insurance contracts
  • Any changes in methods and processes for estimating inputs used to measure contracts, the reason for each change, and the type of contracts affected.
  • to the extent not covered above, the approach used: Disclosure for Insurance contracts
    • To distinguish changes in estimates of future cash flows arising from exercising discretion from other changes in estimates of future cash flows for contracts without direct participation features Disclosure of significant judgments for insurances
    • To determine the risk adjustment for non-financial risk, including whether changes in the risk adjustment for non-financial risk are disaggregated into an insurance service component and an insurance finance component, or are presented in full in the insurance service result.
    • To determine discount rates Disclosure for Insurance contracts
    • To determine investment components Disclosure for Insurance contracts

Disclosure about insurance risks

Disclosure about the nature and extent of insurance risks – An entity needs to disclose information that enables financial statement users to evaluate the nature, amount, timing and uncertainty of future cash flows that arise from contracts within the scope of IFRS 17 [IFRS 17 93 and IFRS 17 121]. Disclosure about insurance risks

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Disclosures focus on the insurance and financial risks that arise from insurance contracts and how they have been managed. Financial risks typically include but are not limited to, credit risk, liquidity risk and market risk [IFRS 17 122]. Many similar disclosures were included in IFRS 4, often phrased to the effect that an insurer should make disclosures about insurance contracts, assuming that these were within the scope of IFRS 7. The equivalent disclosures now required by IFRS 17 are more specific to the circumstances of the measurement of insurance contracts in the standard, with no cross-reference to IFRS 7. Disclosure for Insurance contracts

General model of measurement of insurance contracts

Disclosure for Insurance contracts

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