IFRS 17 - EY - United · PDF filePage 2 Ihre Referenten Heiko Stüber 7. September 2017...

IFRS 17

Die neuen Regelungen für die Versicherungsindustrie

Berlin, 7. September 2017

Ihre Referenten

Heiko Stüber

7. September 2017 16. IFRS Kongress in Berlin

ERGO Group AGHead Group Controlling und

Group Accounting

Dr. ThomasKagermeier

Ernst & Young GmbHGlobal Lead Insurance Financial

Accounting Advisory Services

Agenda

Wie sehen dieFinanicalStatementszukünftig aus?

Heraus-forderungen in derImplementierung

Wie sieht dieFinance Abteilungder Zukunft aus?

1 2 3

IFRS 17


“For 15 years my actuaries told methey understood our data. I can tell

you now, they did not”CEO of Global Insurer

“For MCEV and SII it’s up to us ifwe take 6 weeks to group model

points. In an IFRS 17 process thatwill reduce significantly”

Chief Actuary of a Global Insurer

“If my MCEV or Solvency numberis out by 5% I lose some face. If wehave the same error in IFRS 17, I’ll

lose my job”Chief Actuary of a Global Group


Was bedeutet “IFRS 17 reality” für das Versicherungsgeschäft

Was bedeutet “IFRS 17 reality” für das Versicherungsgeschäft?

ü New processes required to calculate CSMü CSM roll forward will need to be understood and

explainedü Estimating CSM on transition will be a critical

element impacting future profitAccounting

for CSMPerformance

Reporting

Internalaccounting

systems

Discounting

Disclosures

Best estimates– Removal of

reservemargins

Mainimpacts

ü Question on whether to align withSolvency II

ü Additional process work to determine timevalue of money

ü Need to explain to stakeholders(More significant for long tailed liabilityinsurers)

ü New processes and information to be recorded willinvolve substantial system updates

ü For multinational groups may help with consistency

ü Reporting on new basis – need to understandperformance drivers

ü Disaggregating changes – need to explain it tostakeholders

ü Moving to best estimates maymake results more volatile

ü Increased chances of showing aloss during a year

ü Significantly more information needs to beprovided

ü Additional processes and data are requiredto gather the disclosure information


Agenda




1 2 3


IFRS 17

Wie verändert sich das Balance Sheet?

IFRS 17IFRS 4

Assets

Reinsurance contract assets

Insurance contract assets

Assets

Reinsurance contract assets

Deferred acquisition costs

Value of business acquired

Premiums receivable

Policy loans

Key Changes for liabilities

► Groups of insurance (orreinsurance) contracts that are inan asset position presentedseparately from groups ofinsurance (or reinsurance)contracts that are in a liabilityposition

► Acquisition cost cash flows,premiums receivable andunearned premiums are includedin the measurement of insuranceliabilities

Liabilities

Insurance contracts liabilities

Unearned premiums

Claims payable

Liabilities

Insurance contracts liabilities

Reinsurance contracts liabilities


Statement of Comprehensive Income –Vollständig neues Bild

Insurance revenue X

Insurance service expenses (X)

Insurance service result X

Investment income X

Insurance finance expenses (X)

Finance result X

Other profit and loss items X

Corporate tax (X)

Profit after tax X

Other comprehensive income (X)

Total comprehensive income X

Statement of Comprehensive Income Release in contractual service margin

Change in risk adjustment

Expected claims (in fulfilment cash flows)

Expected expenses (in fulfilment cash flows)

Allocating premium relating to the recovery ofdirectly attributable acquisition costs

Excluding investment components

Expe

cted

Actual claims incurred

Actual expenses incurred

Allocating premium relating to the recovery ofdirectly attributable acquisition costs

Onerous contracts

Excluding investment components

Act

ual

Calculated using locked-in rates (if the OCI option isselected)

Effect of discount rate changes on BEL (if the OCIoption is selected)


Wesentliche Veränderungen in der Erfolgsrechnung:Ein Vergleich

IFRS 17IFRS 4

Insurance revenue

Insurance services expense

Incurred claims and expense

Acquisition costs

Gain/loss from reinsurance

Insurance service result

Investment income

Insurance finance expense

Net financial result

Profit or loss

Discount rate changes on insuranceliability (optional)

Total comprehensive income

Net earned premiums

Interest, dividend and otherinvestment income

Incurred claims and benefits

Change in provisions

Profit or loss

Key Changes

► Insurance contract revenueexcludes investment components

► Revenue and expense arerecognised as earned or incurred

► Insurance finance expense isexcluded from insurance serviceresult and is presented (i) fully inP/L or (ii) in P/L and OCI,depending on accounting policy

► Written premiums disclosed in thenotes


Disclosures – Vielzahl von neuen Angaben gefordert

► Purpose:► Information concerning the amount, the future development and uncertainties of cash

flows resulting from the insurance contracts► Qualitative and quantitative information concerning:

► Balance sheet and P/L items► Significant estimations and their changes► Type and extent of risks, including sensitivity analysis

► Adequate aggregation level► Contract type, product group► Geography► Reportable segment, as defined in IFRS 8

► Transition to income and expenses in P/L and to assets and liabilities in balance sheet intabular format

► Information concerning reinsurance assets

Inge

nera

l


Disclosures – Overview

Type and extent of risks

Risk appetite

Risk management

Regulatory law

In general Other risks

Risk exposure

Risk concentrations

Maturity analysis

Sensitivity analysisconcerning market risksSensitivity analysis

Risk concentrations

Claims settlement

Insurance risks

Risk exposure

Development of B/Sitems during business

year

Used valuation methods andinputs

Interest curve fordiscounting

Balance sheet and P/L items

Transition of booked premiumsto insurance revenues


Unsere Thesen

Die vom IASB verfolgten Ziele des IASB an höhere Transparanz und Vergleichbarkeitwerden - wenn überhaupt - erst nach Jahren erreicht

1

Die neue Struktur und Aufteilung im BS / p&l ist grundsätzlich besser geeignet als diebisherige Aufteilung der Erfolgskomponenten eines Versicherungsgeschäfts

2

Das total income in 2022 wird intern und extern schwer zu erläutern sein3


Agenda


Heraus-forderungen inder Implemen-tierung


1 2 3


IFRS 17

Top challenges in der Umsetzung

Past

Spend vs. value –IFRS 17 minimum vs.

efficient financefunction

Purpose

Planning, Budgeting, Forecasting and MI

Master Data Management

Governance Risk Compliance

Source Systems (Policy, Claims,Reinsurance Assets) IFRS17 engine

Incl. accounting rules

Operational Data Store

Allocations ConsolidationGL /Ledgers

Actuarial and Risk models

Reporting, Analytics and Visualisation, Disclosure

Avs.E

1 Past

Understanding andexplaining commercial

impacts (incl. tax)

Commercialimpacts

2 Past

Transition strategy -How to approach

transition incl.understanding impact onfuture profits, dividends

and new products

Transition

3 Past

Developing an ‘IFRS 17engine‘ for the

Contractual ServiceMargin and accounting

rules

IFRS17 engine

4 Past

Unit of account strategyfor determining CSM andperforming onerouscontract test

Unit of account

5 Past

Data- modelling,storage, governance,

control, etc.

Data Management

6


12 kritische Themen für die Umsetzung

Actuarial model/ integrated solution

Definition& scope00

Level ofaggregation03

Measurement04

Initial / subsequentmeasurement05

Reinsurance07

Onerous contract06

Disclosure09Measurement model

Expected cash flows

Discount rate

Time value of optionsand guarantees

Risk adjustment fornon-financial risk

Contractual servicemargin (CSM)

Attributable expense

Recognition02

Transition08

Investorstory12

Presentation11

Separation01IFRS 9/ 17interactions10

Act

uari

alm

odel

/in

tegr

ated

solu

tion

Festlegung der AccountingPolicy

Messung und aktuarelle Methoden Transition, Ausweis und Darstellung


Wo steht die Versicherungsindustrie in der Umsetzung?

1 Peers included in comparative analysis: Axa, AIG, Allianz, BNP, Generali, HSBC, Munich Re, NN Group, Prudential, Zurich2 ‘–’ Budget is unknown or not yet determined

Comparative Analysis1 A B D E F G I H L M

IFR

S17

1. Implementation program status Y Y Y N Y Y Y N Y N

2. External advisor appointed Y Y Y N N Y N Y N N

3. Expected impact M H H H H H H H H H

4. Estimated budget2 $25m $60m $150m - - $300m $100m - $300m -

$25m-$500mbudget range

1/2have appointed an

external advisor

90%+expect the impact to be

significant (High)

70%have initiated theirIFRS 17 program


Unsere Thesen

IFRS 17 sind keine Accounting-Projekte; der weitaus größere Aufwand besteht in derAnpassung der aktuariellen Modelle und der IT-Datenstrukturen

1

2021 klingt weit weg, aber für die meisten Unternehmen ist die Zeit zur Umsetzungeher knapp gemessen

2

Es gibt keine “billigen” IFRS 17 Projekte trotz Solveny II-Grundlagen3


Agenda



Wie sieht dieFinanceAbteilung derZukunft aus?

1 2 3


IFRS 17

Neues Setup innerhalb Finance notwendig?Wer hat zukünftig welche Rolle?Zusammenspiel von Finance, Actuariat und Risk muss neu geklärt werden für effiziente Abläufe und Konsistenz inden Ergebnissen

Heute

Uneinheitliche Entscheidungen

Inkonsistente und nicht verlinkteDaten

Silo-bezogende Systeme

Manuelle Überleitungen /Abgleiche

Finance

Actuarial

Risk

Keine übergreifenden Standards

Verschiedene Interpretation desjeweiligen operating model

Zeitnahe Entscheidungen

Integrierte und gemeinsamgenutzte Daten

EntscheidungsgetriebeneAbläufe

Gemeinsam genutzteAnwendungen

Workflow basierte Strukturen

Cross-funktonale Integreation

Zukünftig

Notwendig: Engere Verbindung der drei Bereiche und der operative Geschäftseinheiten zur Erfüllung der zukünftigen Anforderungen

1


Auswirkungen auf Daten & SystemeKomplex und teuer

High to Medium complexity across Data and Systems

Master Data Management

Governance Risk Compliance / Workflow

SourceSystems

(Policy, Claims,Reinsurance,

Assets) IFRS17engine

Operational Data Store

Planning, Budgeting, Forecasting and MI

AccountingRules engine Allocations ConsolidationLedgers

Actuarial andRisk models

Reporting, Analytics and Visualisation, Disclosure

High severity and complexity of change, significant additionalinvestmentMedium severity and complexity of change, limited additionalinvestmentLow severity and complexity of change, leverage currentchange/transformation initiatives


Unsere Thesen

Auch wenn TOM nicht explizit Bestandteil der IFRS Projekte ist, werden bestehendeAbläufe und Strukturen im Unternehmen wesentlich verändert werden müssen

1

Im konzernweiten Setup wird es trotz Kostendruck und Konistenzwunsch weiterwesentliche dezentrale Applikationen und Systeme geben

2

Konsistenz im internen und externen Reporting wird die zentrale Herausforderung sein3


Zentrale und gut strukturierteProjekt-Strukturen und Verfahrenreduzieren das Umsetzungsrisiko

Benötigt werden Spezialisten fürden fachlichen Input, aber auchfür Prozessabläufe undDatenstrukturen

So weit so gut:Erste Erfahrungen aus den IFRS 17 Projekten

Der Standard selbst ist bereitskomplex – die Implementierungweitaus komplizierter und diespätere Realität noch mehr!

IFRS17 ist mehr als ein Accounting-Change – es hat wesentlichenAuswirkungen auf die gesamteOrganisation (front-, middle- andback-office)

Die Definition und Verfügbarkeitder notwendigen Daten für dasinterne und externe Reportingdarf nicht unterschätzt werden

Der größte Zeitanteil in den Projektenentfällt auf end-to-end Veränderungenfür Daten, Systeme & Prozesse – ITdarf nicht zum Engpassfaktor werden

Enge Zusammenarbeit und Abstimmung der definiertenProjektverantwortlichen für Accounting, Aktuarielle Themen(financial & business models), IT-Systeme und dem Projektleiter istein notwendiges Element für die erfolgreiche Umsetzung Language &

Culture

Communication

Scoping &Planning

1 2 3

4 5 6

7


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IFRS 17 - EY - United · PDF filePage 2 Ihre Referenten Heiko Stüber 7. September 2017...

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