OLDWICK, N.J.--(BUSINESS WIRE)--In this A.M.BestTV episode, Carlos Wong-Fupuy, senior director, A.M. Best, examines the impact the latest International Financial Reporting Standards, or IFRS 17, which takes effect in 2021. Click on http://www.ambest.com/v.asp?v=mexicoelection718 to view the entire program.
The new IFRS 17 is expected to have a significant impact on the insurance industry, and although IFRS 17 will mainly effect life companies, Wong-Fupuy said non-life companies should not disregard it.
“IFRS 17 does not make an explicit distinction between life and non-life businesses,” said Wong-Fupuy. “There is a general model that is probably most appropriate for life business. …Nevertheless, bear in mind that there are a number of non-life companies writing multi-year business, with large corporate and liability risks; therefore, by no means can companies think that they are outside the scope of IFRS 17.”
Wong-Fupuy also said he believes that there will be no significant impact on how A.M. Best analyzes a company’s financial strength.
“In terms of immediate impact, I would not expect anything significant. The A.M. Best approach is always to try to see a company from an economic point of view. To the extent that the current accounting standards are reflecting that economic reality, I would not expect significant differences."
To access a copy of this briefing, titled, “IFRS 17—Enhanced Transparency Will Be Worth the Effort for Insurers,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=275655.
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