A guide to the challenges ahead
The standard confirms that reinsurance needs special treatment. Reinsurance contracts held are to be valued and accounted for separately. The requirements don’t look particularly challenging at first glance, but common reporting practice for many insurers is an approximate method of ‘netting down’ (that is gross less reinsured). This won’t be adequate post-2021, and insurers that underestimate the consideration required for reinsurance as part of their IFRS 17 implementation plans could face an unpleasant surprise under the new regime.