IFRS 17 is now fully in force and quite a few insurance companies have reported under the new standard for their 2023 annual financial reports. This report covers the analysis of financial statements in FY23, outlining any new trends that have emerged and any similar themes to the findings in interim 2023.
The report compares the disclosures made by 10 of the largest UK life insurers and 18 general insurance companies that have a major presence in the UK market. Despite certain expected disclosures being mandatory at FY23, we still observe divergences in approaches, calibrations and the level of granularity adopted. Some of the additional disclosures at FY23, such as the CSM maturity analysis, provide helpful information to stakeholders and we expect it to continue to receive attention in future periods.
From a KPI perspective, adjusted operating profit (AOP) and adjusted equity continue to be key metrics for life insurers. The combined ratio (COR) continues to be one of the main metrics used by GI companies, albeit on a discounted basis and with varying definitions. We don't expect insurers to make wholesale changes to KPIs over the short term, as we expect they will want stakeholders to familiarise themselves with the new reporting. Over time though, we may see some convergence in approaches or calibrations.
Download the report to read our detailed analysis which includes a detailed comparison of company disclosures and thoughts on the key next steps for insurers.
Emma Caruana, contributed to this Short Read.
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