insurance breakfast briefing ifrs 17 accountancy standard · total comprehensive income x statement...

Insurance Breakfast Briefing – IFRS 17 Accountancy Standard

The road to successful implementation. What now?

2

Eimear McCarthy

Opening

3

Sinead Minnock

IFRS 17 Survey

4

2012

Winning the Waiting Game

2018

Countdown Underway

2013

Gaining Momentum

• Alignment in opinion across borders towards adopting a global framework for insurance reporting

• Uncertainty in relation to adoption timelines was the biggest challenge according to insurers

• Insurers preparations were initiated using internal resources

• Assessing the impact of the new financial reporting regulations as well as understanding the cost of implementation

• More positive views in relation to the transition as it would lead to greater transparency and improved investor relations

• Moving towards the effective date with accelerated pace and cautious optimism on ability to achieve compliance

• Now less sceptical that the benefits will outweigh the cost

Global IFRS Insurance Survey 2018

2021 Countdown Underway

5



6



7



8



9



10



11



12



13



Closing Insights

Insurers are more prepared and positive about the changes necessary to comply with IFRS 17.

Significant challenge in getting systems technology ready.

Financial statement impact will take time to emerge.

Second order impacts such as product design and KPI’s will also take time to emerge.

Greater integration and collaboration expected to result from organisational restructuring.

82% of insurers expecting a positive impact in their ability to retain staff.

14

Carol Lynch

Financial Reporting

© 2018 Deloitte Ireland LLP. All rights reserved. 15

• The IFRS Insurance regulations have a very ambitious goal: make insurance revenue presentation comparable to all other types of revenue under IFRS.

• The degree of change will vary based on the types of business written

• The change will affect both preparers and users of the financial statements

• On top of the presentation requirements, IFRS 17 will impose a much greater set of disclosure requirements than under current IFRS

• They may be significant changes to key financial metrics

• Communication is key

Why is presentation and disclosure important?

Presentation and Disclosures


IFRS 17 Boot Camp

Gross written premium

Fees and commission

Net investment income

Net income

Policyholder claims

Change in insurance liability

Net policyholder claims and benefits incurred

Acquisition costs

Amortisation of acquired in-force business

Administrative expenses

Total operating expenses

Profit or loss

X

X

X

X

X

X

X

X

X

X

X

X

Other comprehensive income

Total comprehensive income

X

X

Insurance revenue

Insurance service expenses

Incurred claims and expenses

Amortisation of acq. costs

Experience- liability for incurred claims

Change in estimates – liability for incurred claims

Insurance service result

Investment income

Interest on insurance contract liabilities

based on P&L presentation rules

Finance result

Profit or loss

X

(X)

(X)

(X)

X/(X)

X/(X)

X

X

(X)

X

X

Insurance finance income or expenses based on OCI presentation rules

Total comprehensive income

(X)

X

Current presentation format IFRS 17 presentation

Current format versus current proposal

Changes in presentation – Statement of comprehensive income


Presentation: balance sheet

IFRS 17

Current IFRS IFRS 17

Assets

Insurance contract assets

Reinsurance contract assets

Liabilities

Insurance contract liabilities

Reinsurance contract liabilities

Groups of insurance and

reinsurance contracts in an

asset position presented

separately from those in a

liability position.

Assets

Deferred acquisition costs

Insurance debtors (Premiumsreceivable)

Reinsurance contract assets

Liabilities

Unearned premiums

Insurance contract liabilities

Insurance creditors (Premiumspayable to reinsurers)

Acquisition cost cash flows,

premiums receivable and

unearned premiums are

included in the measurement

of insurance contract

asset/liability.

1

2


IFRS 17 Boot Camp

Current, unbiased and probability weighted

estimates of the contractual cash flows

Block 1 – during current coverage

The expected release from the BBA liabilities less the investment component will be the first figure to be included in the revenue. These expected cash flows are undiscounted because the effect of discounting is taken through the insurance finance income orexpenses

Statement of comprehensive income

Statement of comprehensive income (SCI)

IFRS 17

Insurance revenue X

Incurred claims and expenses (exclude invest component)

(X)

Amortisation of acquisition costs (X)

Exp. adjustment - liability for incurred claims

(X)


(X)

Losses from onerous contracts (X)

Insurance service result X

Investment income X / (X)

Insurance finance income or expenses

(X) / X

Net finance result X / (X)

Profit or loss X


based on OCI presentation rules

X

Total comprehensive income X



IFRS 17

Insurance revenue X

Incurred claims and expenses (exclude investment component)

(X)


Exp. adjustment - liability for incurred claims

(X)


(X)





(X) / X


Profit or loss X



X



• Incurred claims and other expenses relating to an insurance contract issued, reported as a separate line item after disaggregation of investmentcomponents.

• These are claims/benefits/expenses incurred/paid related to the portion of the remaining coverage that generates insurance revenue in the period.


Block 1 – post coverage

The future cash flows are re-estimated every period with changes reflected in theSCI

The change of estimates of future cash flows on incurred claims are reflected in the SCI

Current, unbiased and probability weighted

estimates of the contractual cash flows


IFRS 17

Insurance revenue X


(X)


Exp adjustment- liability for incurred claims

(X)

Chg in est – liability for incurred claims

(X)




Insurance finance income or expenses (X) / X


Profit or loss X


X




Discounting of cash flows

Block 2

The interest expensefrom the discount unwinding is recognised in the SCI


IFRS 17

Insurance revenue X


(X)


Exp. Adjustment - liability for incurred claims

(X)


(X)





(X) / X


Profit or loss X



X



The discount rates are re-estimatedevery period with changes recognised in the SCI (OCI option or P/L)


Risk adjustment

Block 3


IFRS 17

Insurance revenue X


(X)


Exp. adjustment – liability for incurred claims

(X)

Chg in est – liability for incurred claims

(X)






Profit or loss X


X


The portion of the RA changes that relates to incurred claims willbe reported in P&L through this line


The RA in the liability for remaining coverage is re-measured at each reporting period and the movement is recognised in the SCI for the portion of the change that relates to the coverage period expired in the reporting period. The other changes will flow in the unlocking of the CSM.

After coverage period the changes in the RA will feed the expense line only because the key principle is that insurance coverage is the only service to generate insurance revenue.

© 2018 Deloitte Ireland LLP. All rights reserved. 23IFRS 17 Boot Camp

The CSM is released based on passage of time and coverage unit, in a way that reflects this principle on a group basis

Contractual service margin

Block 4

Acquisition costs are included inBEL.



IFRS 17

Insurance revenue X


(X)

Amortisation of acquisition costs

(X)

Experience adjustment - liability for incurred claims

(X)


(X)





(X) / X


Profit or loss X



X



Contractual service margin

Block 4


IFRS 17

Insurance revenue X

Incurred claims and expenses (X)


Exp. variance - liability for incurred claims (X)


(X)






Profit or loss X


X


If the contract is part of an onerous group at initial recognition, there is no CSM. A loss is recognised immediately in the P&L



Present value of projected cash flows using current discount rates

Present value of projected cash flows using P&L discount rates

Other Comprehensive Income (optional)


Expected unwind of discount rates on insurance liabilities (P&L disc. rates)

Loss recognition on onerous contracts (incl.

initial)

Change in cash flows from liabilities for incurred claims

(BEL+RA)

Experience variance from loss components

and liabilities for incurred claims

Actual net cash outflows during the period(excl. inv. component)

Insurance service expenses

Release of CSM grossed up for acq.

costs amort.

Change in risk adjustment rem.

coverage

Expected net cash outflows during the period (excl. inv. component)

Statement of Profit or Loss

Insurance revenue

Amort. of acquisition costs (CSM gross up)

Brand new insurance revenue and expenses –Disaggregation of investment components

Recap

Investment income

Actual investment earnings on assets backing liabilities


An entity shall disclose qualitative and quantitative information about:

Qualitative and Quantitative information

Disclosures overview

1. Explanation of recognised

amounts

The amounts recognised in F/S that arise from insurance contracts

2. Significant judgements

The significant judgements, and their changes

3. RisksThe nature and extent of risks that arise from insurance contracts

New IFRS 17

requirements

Some requirements

brought forward from

IFRS 4

Most requirements

brought forward from

IFRS 4


The purpose of disclosing reconciliations is to show how the net carrying amounts of contracts changed during the period

• Separate reconciliations shall be disclosed fordirectbusiness and reinsurance

• Provide reconciliations in tables

• Present at beginning and end of period, disaggregated intoassets and liabilities

1. Explanation of recognised amounts

IFRS 17 Boot Camp 27


Relationship

between B/S

and P&L

Source IASB Effects AnalysisPara 100

Para 103

Para 105

1. Explanation of recognised amounts


1. Explanation of recognised amounts B/S

Source IASB Effects Analysis

Para 104

Para 101


Source IASB Effects Analysis

SCIP

ara

10

6Analysis of insurance revenue1. Explanation of recognised amounts


• Methods used to measure insurance contracts and the processes for estimating the inputs, with quantitative information:

– changes in estimates of future CF arising from the exercise of discretion from other changes in estimates (indirect parcontracts),

– RA for non-financial risk, including whether changes in RA are disaggregated into an insurance service component and finance component or presented in full in the insurance service result,

– Discount rates

Inputs, assumptions and estimation techniques

2. Significant judgementsN

ew

in

IFR

S1

7

• If an entity chooses the OCI option, disclose an explanation of the methods used to determine the insurance finance income or expenses recognised in P&L.

• Disclose the confidence level (CI) used to determine RA. If the entityuses a technique other than CI, it shall disclose the technique usedand corresponding CI.

• Disclose the yield curve (or range of yield curves) used to discount CF that do not vary based on the returns on underlying items.N

ew

in

IFR

S1

7


• Effect of each regulatory framework in which the entity operates; e.g., minimum capital requirements or required interest rate guarantees.

• Disclose the fact if regulation specifically constrains the entity’s practical ability to set a different price or level of benefits for policyholders with different characteristics, and the entity chooses to include these contracts in the samegroup

Regulatory matters

3. RisksN

ew

in

IFR

S1

7


Premium allocation approach

Specific additional disclosures

If the entity adopts PAA, also disclose:

a) Which of the PAA criteria it has satisfied;

b) Whether it makes an adjustment for the time value of money and the effect of financial risk

c) The method it has chosen to recognise insurance acquisition CF (deferral or expensed as incurred)


Transition

Specific additional disclosures

With regards to transition, an entity shall disclose:

Reconciliation of the opening to closing CSM, and amount of insurance revenue, separately for:

a) insurance contracts that existed on 1/11/2020 to which the entity has applied the modified retrospective approach;

b) insurance contracts that existed on 1/11/2020 to which the entity has applied the fair value approach; and

c) all other insurance contracts

For all periods in which disclosures are made applying the modified retrospective approach or the fair value approach, explain how it determined the measurement of insurance contracts on 1/11/2020.


• The proposed disclosures would be detailed and onerous to apply without strong systems, data and processes designed to produce these disclosuresefficiently

• The disclosure of the confidence level would require investment in actuarial systems that would be able to produce the percentile for the confidence level based on the RA amount calculated with another valuation technique

• Insurers will need to determine the new disclosure requirements that will be built into the chart of accounts and those that will be prepared in off-linesystems

Practical implications

Implementation considerations for disclosures

36

Joanne Lonergan

CSM – Contractual Service Margin


The general model a.k.a the building blocks approach (“BBA”)

Recap - Measurement Requirements

Measured at inception as the expected contract profit to be earned as services are fulfilled.It is adjusted for changes in non-

financial variables affecting future coverage cash flows. It accretes interest based on day 1 discount rate (locked-in rate)

An entity-specific assessment of the uncertainty about the amount and timing of future cash flows

An adjustment that converts future cash flows into current amounts

Principles of CSM

• An accounting mechanism for recognising profit over the coverage period.

• Expected profit as it sells an insurance contract

• Absorbs changes in future cash flow expectations for release over time

• Profit measured and reported based on the delivery of the “insurance coverage service”

• CSM at initial inception = Max(0, - BEL + RA)

• Amount that results in no income or expenses

• Deferred profit absorbs assumption changes for future coverage (“Unlocking”)

Expected (probability-weighted) cash flows from premiums, claims, benefits, expenses and acquisition costs

‘Fulfilment cash flows’

Total IFRS Insurance Liability

Block 1: Expected Future

Cash Flows (unbiased probability

weighted mean)

Block 4:Contractual Service

Margin (“CSM”)

Block 3:Risk Adjustment

Block 2:Time Value of Money

‘Fulfilment cash flows’

Total IFRS Insurance Liability

38

Subsequent measurement – illustrative example of progression of CSM from inception

Contractual Service Margin

-

50

100

150

200

CSM Opening New contracts

added to Group

Interest

accreted to CSM

Changes in

value of FCFs

Impact of

currency

changes

Amortisation of

CSM

CSM Closing

Reconciliation of opening and closing CSM

• CSM is subject to a floor of zero.• Given the loss component is zero, subsequent reductions in FCF (i.e.

improvements in profitability) should be allocated to the loss component until the CSM is reduced to zero. Only the excess is allocated to CSM.

39

Subsequent measurement – Key Considerations


1. Opening Balance

Monthly or quarterly reporting Calculation

Store by unit of account Systems

2. Interest Accretion

Use locked in yield curve at initial recognition Methodology

Applied to opening CSM balance Methodology

Locked in yield curve for each quarter, or recalculate a new locked in yield curve at each reporting date

Methodology

How to derive? Backsolve? WA yield curve? Calculation

Currency considerations Calculation

Should FCF’s be recalculated using this locked in UoA yield curve? Methodology

Storage of locked in yield curves Systems

40



2. Interest Accretion

CFO Forum – Discount rates

Background

• Impact of assumption updates is absorbed in the CSM at locked in rates

• BEL is measured at current rate

• Difference between locked in and current rate is reflected in the P&L

Implications

• Current period result significantly distorted by discount rate component of impact of assumption changes (particularly where BEL component is an asset)

• One respondent commented that a 12% difference in the net finance result was due to calculating interest on the CSM at the locked-in rate and that this does not reflect the financial performance of the insurance contracts.

• In extreme example where only interest rates change (and no other assumptions), the CSM and related amortisation would change if the CSM is accreted at current interest rates => not appropriate

• However issue is the anomalous result that is produced by the impact on P&L due to the different interest rates being used

41



3. Impact of adding new business

New business on new contracts added to UoA Methodology

Separation of new business vs existing Calculation

Onerous vs profitable contracts Methodology

Discount Rate? Calculation

4. Change in fulfilment cashflows relating to future exposure

Actuarial models Systems

Allocation of risk adjustment Methodology

Allowance for NB on existing contracts Methodology

Currency considerations Calculation

Discount rate? Calculation

Assumed and ceded Calculation

Policy ID’s – assumed and ceded Systems

42



6. Amortisation of CSM

Identification of coverage units Systems

Discounting? Methodology

CSM at the reporting date * (Actual CU during reporting period)/(Actual CU during reporting period + Expected future CU)

Calculation

Storage of coverage units Systems

5. Impact of currency changes on the CSM

Currency conversions and/or movement in FX rates Calculation

FX rate or curve? Methodology





How are coverage units determined?

• Systematic allocation of CSM to each period that represents service provided.

• Coverage units are assessed at each reporting period and are assessed prospectively

• Assess the expected coverage duration and the quantity of benefits provided for each contract

• Impact of new contracts joining the group and derecognised contracts.

TRG Comments (May 2018)

• Not an accounting policy choice

• The period in which insurance risk is held ≠ coverage period

• Expectations of lapses incl. as impact exp. duration of coverage

• Different levels of service across periods should be reflected

• Suggested methods for determining benefits:

1. Straight line allocation based on passage of time

2. Max contractual cover

3. Premiums

4. Expected cashflows





How to calculate the amount recognised in P&L – Base Example

Recognition at the end of period 1

- A group with expected duration of 4 coverage periods

- Identical quantity of benefit in each period

- Day 1 CSM of €160

20 20 20 20

€40

Period 1 Period 2 Period 3 Period 4

CSM in BS:

• 20/80 (current CU /current CU +remaining CU)

• Recognise ¼ * €160 CSM in profit and loss

• Therefore CSM in BS = €120

Coverage Units

CSM P&L release

CSM in BS €120





20 20 20 20

€40 €40

Period 1 Period 2 Period 3 Period 4

€40 €20

CSM in BS:

• 20/40 (current CU /current CU +remaining CU)

• Recognise ½ * €40 CSM in profit and loss

• Therefore CSM in BS = €20

Coverage Units

CSM P&L release

How to calculate the amount recognised in P&L – Increase in coverage duration

Recognition at the end of period 4

- Same example as base except that in period 4 it becomes known that the expected coverage will continue longer than originally expected (for 5 years)

20

Period 5

CSM in BS €120 €80 €40 €20


Contents

• What is a Financial Impact Assessment (FIA)

• Background to the Deloitte FIAT – IFRS 17 Reference Model

• Structure of the FIAT

o Inputs

o Calculations

o Outputs

Overview

Details

Client Name Prepared by

Demo Client FIA Group

Model Name Signed off by

BBA Example FIA Group

Product Type Date

Term 31/07/2017

The IFRS17 Reference Model has been developed to assess the final standard of IFRS 17 Insurance Contracts, published in May 2017

by the International Accounting Standards Board (IASB). The IFRS17 Reference Model considers the standards applying to both non-

participating (Building Block Approach) and participating contracts (Variable Fee Approach). The tool produces illustrative Balance

Sheets and Income Statements to show the high level impact of IFRS17.

IFRS17 Reference Model

Model Release 3

Start

1

2

3


What is a Financial Impact Assessment (FIA)?

• Key objective is to understand the financial impacts of IFRS 17:

o Profit profiles, transition, P&L, balance sheet, future profit volatility, KPIs.

• A FIA enables informed decision making defining the ‘As Is’ and ‘To Be’ situations.

Rules of thumb for a FIA?

DON’Ts DOs

Use simplifications e.g. make “wider” groups

for calculation of CSM and use historical

assumptions.

Make use of information available from other

processes e.g. Solvency II.

Perform a FIA for new business initially; and

extend to a selection of your most significant

inforce book.

Extrapolate results from one cohort year to

another cohort year for contracts with similar

profitability and risk profile.

Avail of other approaches permitted in the

standard, such as the modified retrospective

approach.

Forget what your tolerance for your financial

impact assessment is.

Lose focus on the big picture.

Start building a model for the FIA without

understanding your data and approach.

Try to address all data gaps.

Forget to document all data and information

gaps identified as part of the process and

start thinking of how you will address those.

Forget the limitations and bias the

simplifications may introduce in your final

results.

Think that “one size fits all”.


Background to the FIAT

The Financial Impact Assessment tool can generate outputs to enable you to:

1. Understand the impact of the new IFRS requirements on the assets and liabilities on your balance sheet (including at transition).

2. Understand the impact on future distributable profits and how the profit profile may change over time.

3. Understand the impact on income statement and balance sheet disclosures.

4. Understand and sensitivity test the impact of different implementation choices (e.g. BBA vs. VFA, OCI or not, ).

5. Highlight areas of high impacts to prioritise efforts.

Key Features modelled Comments

Building Block Approach (BBA) √

Variable Fee Approach (VFA) √

Premium Allocation Approach (PAA) √

Non-Participating product – Term (BBA) √

Participating product – SP Unit Linked (VFA) √

Internal/External Cash flows √

Changes in assumptions (Economic and Demographic) √

Best Estimate Liabilities √

Risk Adjustment √

Contractual Service Margin (Run-off on number of basis) √

Direct and Non-Direct expenses √

Other Comprehensive Income (OCI) √

New Business √

Dividends √

Assets (only bonds and cash) √

Taxation √

Financial Statements √

Charts comparison √

Transition √

Unit of Account √

Yield Curve application √

Projection years (50 years) √

Presentation enhancement √

Timing of cashflows (BoY, MoY, EoY) √


Input – Calculations - Output

Structure of the FIAT


Internal Calculation

FIAT - Inputs

Model Parameters

• Calculation approach

• Source of cashflow input

• Allowance for assumption changes (experience / discount / returns)

• Timing of assumption changes

• Run-off of Risk Adjustment

• Amortisation approach for CSM

• OCI solution

• Discounting (beginning / middle / end of year)

• Yield Curves


External Input


FIAT - Inputs

Model Parameters

• Calculation approach

• Source of cashflow input

• Allowance for assumption changes (experience / discount / returns)

• Timing of assumption changes

• Run-off of Risk Adjustment

• Amortisation approach for CSM

• OCI solution

• Discounting (beginning / middle / end of year)

• Yield Curves


External Input


FIAT - Inputs


External Input

• System generated (eg. Prophet / Excel)

• Demographic information

• Cashflows for:

o Premium

o Benefits (Death / Surrender / Maturity)

o Expenses (Direct / Acquisition / Non-Direct)

o Risk Adjustment

• Policy level information (annual premium, no. of policies, face amount per policy)

• Expense assumptions

• Risk Adjustment percentage

• Demographic information

o Lapse rate

o Mortality rate

• Changes in assumptions over time


FIAT - Calculations

• Decrements

• BBA / VFA / PAA calculations

• Future cashflow projections

o Premium, benefits, expenses

o Experience adjustments

• Discount component and unwind

• Risk Adjustment

• Contractual Service Margin (CSM)

o Initial recognition

o Treatment of onerous contracts

o CSM amortisation

o Impact from assumption changes


ShR - Building Blocks by year - BBA

Description: This worksheet displays a chart showing the building block assets and liabilities over time

IFRS17 Reference Model - Demo Client 10/08/2018

Shareholder - Insurance Contract Portfolio - Building Block Approach

Amounts are expressed in €

Building blocks approachInception Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

PV BEL 48,008,277- 60,170,498- 44,732,178- 31,500,160- 20,699,285- 9,582,087- 3,813,653- 82,087- 1,793,480 1,771,955 253,536

Risk Adjustment 20,340,701 19,089,889 17,780,737 16,413,626 14,989,228 12,223,916 10,775,637 9,340,926 7,920,032 6,513,435 5,142,735

Contractual Service Margin 27,667,576 25,229,033 22,853,469 20,537,051 18,293,798 14,545,090 12,539,412 10,671,069 8,926,469 7,309,293 5,822,950

Total - 15,851,577- 4,097,972- 5,450,517 12,583,741 17,186,919 19,501,397 19,929,908 18,639,981 15,594,684 11,219,222

(70,000,000)

(60,000,000)

(50,000,000)

(40,000,000)

(30,000,000)

(20,000,000)

(10,000,000)

-

10,000,000

20,000,000

30,000,000

40,000,000

Inception 1 2 3 4 5 6 7 8 9 10

Insurn

ace C

ontr

act

Lia

bili

ty (

Asset)

Insurance Contract Portfolio Building Blocks

PV BEL Risk Adjustment Contractual Service Margin Total

Example 1: BBA run-off – base model

FIAT - Outputs


ShR - Building Blocks by year - BBA

Description: This worksheet displays a chart showing the building block assets and liabilities over time


Shareholder - Insurance Contract Portfolio - Building Block Approach


Building blocks approachInception Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

PV BEL 39,949,553- 52,605,269- 37,683,949- 24,992,285- 14,754,888- 4,733,185- 461,502 3,624,377 4,936,427 4,356,769 2,294,221

Risk Adjustment 41,487,274 38,936,301 36,266,297 33,478,040 30,572,895 24,932,722 21,978,790 19,052,497 16,154,359 13,285,351 10,489,539

Contractual Service Margin - - - - - - - - - - -

Total 1,537,721 13,668,968- 1,417,652- 8,485,755 15,818,007 20,199,537 22,440,293 22,676,875 21,090,786 17,642,120 12,783,759

(60,000,000)

(40,000,000)

(20,000,000)

-

20,000,000

40,000,000

60,000,000

Inception 1 2 3 4 5 6 7 8 9 10

Insurn

ace C

ontr

act

Lia

bili

ty (

Asset)

Insurance Contract Portfolio Building Blocks

PV BEL Risk Adjustment Contractual Service Margin Total

Example 1: BBA run-off – RA increased from 5% to 10%, 2% increase in death benefit

FIAT - Outputs


Example 1: BBA run-off – base model

FIAT - Outputs

ShR - Net Income by Source - BBA

Description: This worksheet shows a chart with the net income split by source


Shareholder - Net Income by source - Building Block Approach


(1,000,000)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Experience gains (losses) Release from risk Contractual service margin Investment income, net of general expenses


Risk Adjustment Release

Investment Income net of General Expenses

Experience Gain/Losses


ShR - Net Income by Source - BBA

Description: This worksheet shows a chart with the net income split by source


Shareholder - Net Income by source - Building Block Approach


(2,000,000)

(1,000,000)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Experience gains (losses) Release from risk Contractual service margin Investment income, net of general expenses

Example 1: BBA run-off – RA increased from 5% to 10%, 2% increase in death benefit

FIAT - Outputs


Risk Adjustment Release

Investment Income net of General Expenses

Experience Gain/Losses


Example 2: BBA vs PAA eligibility –insurance contract liabilities

FIAT - Outputs

Insurance Contract Liabilities DeleteGraph


Example 2: BBA vs PAA eligibility –insurance contract liabilities

FIAT - Outputs

Profit Signature DeleteGraph

62

Eimear McCarthy

Closing

63

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