Research On The Impact Of IFRS17 On The Insurance Company

In recent years,with the economic globalization,the insurance industry has also developed well,and the insurance industry’s accounting treatment of insurance contracts has become increasingly problematic.Since the issuance of the interim international insurance contract standard IFRS4 in 2004,the accounting treatment of the insurance industry has been standardized to a certain extent.But IFRS4 does not have uniform hard and fast rules in many recognition and measurement aspects,which makes financial statements highly manipulable,and the accounting treatment of insurance contracts is regulated differently in different countries and regions,and the accounting treatment of the insurance industry differs greatly from that of other industries,which makes the insurance industry lack comparability among insurance companies and between the insurance industry and other industries,and the financial data lack transparency.In order to address this issue,on May 18,2017,the IASB officially issued IFRS 17-Insurance Contracts after several consultations and amendments.This change in accounting standards has greatly standardized the accounting treatment of the insurance industry,enhanced the comparability of financial information of insurance contracts in the insurance industry,and clearly reflected the substance of insurance contracts to market investors.However,the huge changes in the standard will bring drastic impact to the insurance industry and make insurance companies affected in different aspects.Based on the above background,this paper focuses on the development history of the standard,several important changes of the new standard and the analysis of the selected case company,New China Life Insurance Company LTD.After the analysis of this paper,the major changes of the new standard are mainly concentrated on the unbundling of the investment component of insurance contracts,the requirements of the recognition point of insurance contracts for loss-making contract groups,the measurement model of insurance contract liabilities,the presentation of the income statement of insurance contracts and the presentation of financial information.In addition,in the case study of Xinhua Insurance,it is assumed that the overall changes resulting from the implementation of the standard will cause a significant decrease in premium income of the insurance company and will have a corresponding impact on some balance sheet and income statement presentation accounts.In terms of operational management,the implementation of the standard may have an impact on product design,personnel management,internal systems,information systems and budget management.Finally,in order to comply with the transition criteria shift,this paper puts forward corresponding suggestions from three aspects: insurance industry companies,government agencies and consumers respectively.