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Press Release

Willis Towers Watson responds to latest IFRS 17 amendments proposed by IASB

Insurance Consulting and Technology
Finance and Process Transformation

June 27, 2019

The International Accounting Standards Board (IASB) today published the limited scope Exposure Draft (ED), containing key proposed changes to its accounting standard IFRS 17 Insurance Contracts. A 90-day comment period has been set, with responses to the amendments due by 25 September.

ASIA PACIFIC, 27 June 2019 - The International Accounting Standards Board (IASB) today published the limited scope Exposure Draft (ED), containing key proposed changes to its accounting standard IFRS 17 Insurance Contracts. A 90-day comment period has been set, with responses to the amendments due by 25 September.

IFRS 17 Insurance Contracts was published in May 2017 by the IASB and, following issues raised by the insurance industry and other key stakeholders, the independent rule-setting body agreed in October 2018 to re-open certain aspects of the Standard.

This ED brings together tentative decisions proposed by the IASB in the following areas (with most aspects of the Standard unamended):

  • Deferral of IFRS 17 effective date (and IFRS 9 for insurers) by one year to 1 January 2022.
  • Additional scope exclusions for loans and credit cards.
  • Deferral of some insurance acquisition cash flows for newly issued contracts, where there are related expected contract renewals.
  • Recognition of profit across contracts combining insurance and investment services.
  • Changing the accounting of certain reinsurance contracts held in respect of onerous underlying contracts, to remove an accounting mismatch.
  • Extending the risk mitigation option to include the use of reinsurance to mitigate financial risk, again to remove an accounting mismatch.

"We welcome the proposed IFRS 17 Exposure Draft amendments, which address a number of the issues raised by stakeholders," said Kamran Foroughi, Senior Director at Willis Towers Watson. "Certain amendments have substantial implications and the content requires careful analysis. In key areas not addressed by this ED, we expect stakeholders to continue to push for change. However, significant additional changes could require a further postponement of the IFRS 17 effective date, which the IASB strongly opposes.

Paul Headey, Head of Life, Insurance Consulting and Technology, Asia Pacific at Willis Towers Watson, added, "We are helping clients across the globe and across Asia with IFRS 17 implementation. In our experience, life, property/casualty and composite insurers are focusing on solving operational and technology implementation challenges, which are largely unaffected by the Exposure Draft.  As well as considering the Exposure Draft proposals, we believe firms should continue with implementation projects to address these challenges."

About Insurance Consulting and Technology

Willis Towers Watson's Insurance Consulting & Technology business has over 1,200 colleagues operating in 35 markets worldwide. It is a leading provider of advice, solutions and software – primarily to the insurance industry. Its consulting services help clients manage risk and capital, improve business performance and create competitive advantage – by focusing on financial and regulatory reporting, enterprise risk and capital management, M&A and corporate restructuring, products, pricing, business management and strategy.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas - the dynamic formula that drives business performance. Together, we unlock potential.


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