UK Insurers Hit By Biggest Accounting Shake-Up In Decades (INSURANCE DAILY ABSTRACT)
By Oliver Ralph
The International Accounting Standards Board (IASB) is launching a new set of regulations on May 18 that are designed to simplify insurers’ complex financial statements. The rules, IFRS 17, will be implemented in 2021 and aim to help investors easily compare companies in different countries. Hans Hoogervorst, chairman of the IASB, said that without high-quality accounting information, there is no way that investors can have a good view of what is going on. The new standard will have a deeper impact on life insurers than property/casualty insurers. Ferdia Byrne, partner at KPMG, said that profits at some UK life insurers could drop by 10 to 20 percent under the new accounting rules. Under the old rules, profits from annuities were recognized up front, but under the changes profits must be spread across the life of the contract, which can be decades.