Impact on financial statements of insurance companies
Workshop for investors
Warsaw, 2 June 2023
Agenda
Basic concepts of IFRS 17
Calculation examples in the PAA and GMM model IFRS 17 in PZU: detailed discussion of the new
presentation of PZU's results
Attachments
Q&A
3
17
49
70
77
Basic concepts of IFRS 17
Key differences between IFRS 4 and IFRS 17
Area
IFRS 4
IFRS 17
Accounting practice
• Various accounting practices between insurance companies
•
Consistent and clearly defined valuation methodology
•
Better comparability between insurers against each other and over
time
Data requirements
• No explicit requirement on measurement and updates of estimates
• Assumptions are regularly updated to reflect current estimates
and measurement
and assumptions
• Insurance contracts' measurement reflects time value of money
• Limited application of discounting
(discount rate) and uncertainty related to non-financial risk (risk
• Separate presentation of profitable and onerous contracts is not a
adjustment)
requirement
• Separate measurement of onerous and profitable contracts
• Options and guarantees are not fully reflected in measurement of
• CSM representing unearned profit is recognized in line with insurance
insurance contracts
services provided
Profitability drivers
• Lack of transparency about profitability
• Key drivers of profit (investment vs. underwriting) are made
• Difficult identification of key drivers of profit
transparent
4
Comparison of IFRS 4 and IFRS 17 - P&L
IFRS 4
Key components
Net earned premium
Revenue
Investment income
Other income
Net claims paid
Changes in technical provisions
Acquisition costs
Expenses
Administrative and operating
expenses
Expenses for financial assets and
liabilities
Other expenses
Profit or loss before tax
IFRS 17
Key components
Insurance revenue (+)
Insurance service
Insurance service expenses (-)
result
Reinsurance result (+/-)
Investment result (+/-)
Finance result
Insurance finance expense (IFIE) (+/-)
Other result
Other income and expenses (+/-)
Profit or loss before tax
Key takeaways:
Greater transparency
Insurance service result presented separately from insurance finance result
Result on reinsurance held is presented separately from gross business (direct business and accepted reinsurance)
Insurance service revenue and insurance service expense are decreased by non-distinct investment component
Immediate recognition of loss (for the entire coverage period) for onerous contracts
5
Attachments
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Original Document
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Disclaimer
PZU - Powszechny Zaklad Ubezpieczen SA published this content on 01 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 June 2023 14:24:25 UTC.
Powszechny Zaklad Ubezpieczeñ Spólka Akcyjna is one of the leading insurance groups in Poland. The group also develops pension and investment funds management activities. Gross written premiums break down by activity as follows:
- non-life insurance (64.3%): car insurance (57.8% of gross written premiums), fire and damage insurance (22.3%), accident and health insurance (6.8%), liability insurance (6%) and other (7.1%);
- life insurance (35.7%).
Gross written premiums are distributed geographically as follows: Poland (91.2%), the Baltic states (7.4%) and Ukraine (1.4%).
POWSZECHNY ZAKLAD UBEZPIECZE? SPÓLKA AKCYJNA 
