IFRS 17 raises financial statement clarity: Fitch

APAC insurers are reconsidering product offerings.

The implementation of IFRS 17 has improved transparency and comparability in insurers’ financial statements, according to Fitch Ratings. 

Some insurers in the Asia-Pacific region, particularly in South Korea and Taiwan, are reconsidering their product offerings due to IFRS 17.Meanwhile, the standard has had minimal impact on the strategic plans and capital management policies of European and 

Canadian insurers, which remain guided by regulatory solvency requirements. 

Whilst full comparability has not yet been achieved, financial disclosures are becoming more aligned, with further improvements expected in future reporting cycles. 

Fitch noted that IFRS 17, in effect since 1 January 2023, has not altered its assessment of insurers’ underlying profitability. 

However, the introduction of the contractual service margin (CSM) has improved the predictability of profits by recognising unearned income over time, allowing clearer visibility into growth opportunities and risks.