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Author: Tanja Kusterer Publisher: ISBN: Category : Languages : en Pages :
Book Description
At present, the IASB is drafting the Financial Reporting Standard IFRS 4 Insurance Contracts with the aim of increasing the comparability and transparency in the accounting for insurance contracts. In June 2013, the Board released a revised exposure draft which is currently under discussion. The final standard is expected to be published in 2015. The following work analyses the impacts of this new standard on the insurance industry. The first part examines the effects on the financial statements and finds that the introduction of a building-block model that is based on a fair value measurement will increase the volatility in profit or loss and equity, lead to accounting mismatches, change the presentation of profit or loss and introduce complexity. As a strategic consequence, insurers may focus on volatility management, adapt their asset and liability management strategies, shift the management systems from a volume- to a profit-oriented perspective, and reconsider their product mix and pricing strategies. The second part discusses the impacts on an insurer's operations and, based on the expected complexity, additional data, an update of processes and systems, a substantial amount of human resources and an extensive education of all stakeholders involved will be required. Altogether, insurers will incur high costs on an initial and ongoing basis which will also depend on the degree of alignment with other regulations.
Author: Tanja Kusterer Publisher: ISBN: Category : Languages : en Pages :
Book Description
At present, the IASB is drafting the Financial Reporting Standard IFRS 4 Insurance Contracts with the aim of increasing the comparability and transparency in the accounting for insurance contracts. In June 2013, the Board released a revised exposure draft which is currently under discussion. The final standard is expected to be published in 2015. The following work analyses the impacts of this new standard on the insurance industry. The first part examines the effects on the financial statements and finds that the introduction of a building-block model that is based on a fair value measurement will increase the volatility in profit or loss and equity, lead to accounting mismatches, change the presentation of profit or loss and introduce complexity. As a strategic consequence, insurers may focus on volatility management, adapt their asset and liability management strategies, shift the management systems from a volume- to a profit-oriented perspective, and reconsider their product mix and pricing strategies. The second part discusses the impacts on an insurer's operations and, based on the expected complexity, additional data, an update of processes and systems, a substantial amount of human resources and an extensive education of all stakeholders involved will be required. Altogether, insurers will incur high costs on an initial and ongoing basis which will also depend on the degree of alignment with other regulations.
Author: Thomas Post Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The European insurance industry is currently undergoing a substantial change in financial reporting requirements. Beginning in 2005, compliance with the International Financial Reporting Standards (IFRS) has been required in the European Union. Substantial sections of the IFRS - leading to a market-oriented valuation of insurance contracts - are still under construction and will be introduced in the next few years. To date, assessment of the potential impact of the new IFRS accounting and reporting system is largely found in trade literature, and in insurance industry business leader and expert commentator statements. The tenor of opinion is that the IFRS will create a serious challenge for the European insurance industry. To evaluate the impact of IFRS more scientifically, this paper applies ő where indicated ő capital market theory and the concept of information efficiency. The paper suggests that concerns about the effects of IFRS are exaggerated, and reveals that the main area of IFRS impact on the European insurance industry is likely to be on insurance product design.
Author: Thomas Post Publisher: ISBN: Category : Languages : en Pages :
Book Description
The European insurance industry is currently undergoing a substantial change in financial reporting requirements. Beginning in 2005, compliance with the International Financial Reporting Standards (IFRS) has been required in the European Union. Substantial sections of the IFRS - leading to a market-oriented valuation of insurance contracts - are still under construction and will be introduced in the next few years. To date, assessment of the potential impact of the new IFRS accounting and reporting system is largely found in trade literature, and in insurance industry business leader and expert commentator statements. The tenor of opinion is that the IFRS will create a serious challenge for the European insurance industry. To evaluate the impact of IFRS more scientifically, this paper applies where indicated capital market theory and the concept of information efficiency. The paper suggests that concerns about the effects of IFRS are exaggerated, and reveals that the main area of IFRS impact on the European insurance industry is likely to be on insurance product design.
Author: Schweizerische Rückversicherungs-Gesellschaft. Economic Research and Consulting Publisher: ISBN: Category : Insurance Languages : en Pages : 32
Author: Eric Dal Moro Publisher: ISBN: Category : Languages : en Pages : 47
Book Description
Among the many changes and revolutions that the (re)insurance industry will face in the next few years, introduction of the new standard IFRS 4 phase 2 is one that will certainly impact the way in which the (re)insurance business is managed. Not only will this new standard impact insurance accounting schemes, but it will also impact the performance evaluation of the whole insurance industry in general and each line of business being underwritten by the industry. As a result, some companies may decide to withdraw from some lines of business and/or to concentrate on other lines of business. Given that the final stage of implementation is still years away, it seems that many are not spending the time necessary to consider the timing and stress issues that the (re)insurance industry will face when it comes to implementing the new standard. We suggest that these issues need to be considered soon, since they will most likely result in significant organizational changes involving actuaries, finance, risk modeling and investor relations. This small article highlights some of the major issues that (re)insurance companies will face when coming to implement the new standard and proposes some practical solutions to tackle the most pressing ones.
Author: J. David Cummins Publisher: Springer Science & Business Media ISBN: 1461550459 Category : Business & Economics Languages : en Pages : 379
Book Description
Major challenges for life insurance companies have been posed by an unprecedented wave of mergers and acquisitions in the insurance industry and the emergence of non-traditional competitors such as banks, mutual fund companies and investment advisory firms. This is the first book to analyze the determinants of firm performance in the life insurance industry by identifying the `best practices' employed by leading insurers to succeed in this dynamic business environment. The book draws upon data from insurer financial statements as well as upon an extensive survey of life insurer management practices and strategic choices in distribution systems, information technology, mergers and acquisitions, human resources and financial strategies. Generic strategies such as cost leadership, customer focus, and product differentiation are analyzed as well as strategic practices specific to the insurance industry. Best practices are identified by measuring the economic efficiency of insurers and by comparing firms across the industry. Both cost and revenue efficiency are measured relative to best practice efficient frontiers consisting of the industry's dominant life insurance firms. Economies of scale and the effects of mergers and acquisitions on efficiency are also analyzed. Financial strategies are examined with specific reference to pricing policy, valuation of assets and liabilities, and the current state of firm-level risk management systems. The benchmarks established are the result of extensive fieldwork that identifies key financial risks and methodologies to both measure and manage them at the firm level. The results discussed in the book indicate that firm performance is significantly correlated with management practices and strategic choices. Thus, life insurers can improve profitability by adopting optimal combinations of strategies. The book contains important new material on the effects of strategic choices in product distribution systems, information technology, mergers and acquisitions, human resources, and financial risk management policies. In the area of efficiency, the methodology provides a new approach for identifying peer groups of insurers and measuring the performance of individual insurers relative to their peer group. On the topics of risk and pricing, new insights are offered relative to current methodologies and in regard to areas where improvement is clearly warranted. The book concludes with an analysis of the future opportunities and challenges in the life insurance industry facing managers, and the strategic options available to them to cope with these changes.
Author: Irwin T. Vanderhoof Publisher: Springer Science & Business Media ISBN: 1475767323 Category : Business & Economics Languages : en Pages : 389
Book Description
This book explores theoretical and practical implications of reflecting the fair value of liabilities for insurance companies. In addition, the contributions discuss the disclosure of these values to the financial and regulatory communities and auditing firms which are actually calculating this illusive but important variable. It combines contributions by distinguished practitioners from the insurance, accounting and finance fields, with those of prominent academics. One of the central themes of the collection is that adequate disclosure of the true economic value of insurance company liabilities is both possible and desirable. Wherever possible, the insurance valuation process is wedded with modern financial theory. For example, the use of option pricing theory is applied to insurance companies, where the true value of the firm's liabilities is a critical variable. Methods such as cash flow, earned profit and indirect discount are explored.
Author: Tanja Kusterer
Author: Tanja Kusterer
Author: International Accounting Standards Board
Author: Michelle Chong-Tai Bell
Author: Thomas Post
Author: Thomas Post
Author: Schweizerische Rückversicherungs-Gesellschaft. Economic Research and Consulting
Author: Eric Dal Moro
Author: International Accounting Standards Board
Author: J. David Cummins
Author: Irwin T. Vanderhoof