There are a number of areas of IFRS 17 where the International Accounting Standards Board has allowed firms to make a choice on their approach. This paper by Milliman consultants focuses on the approaches available under IFRS 17 for the derivation of the discount rates for use in the various calculations required by the Standard.
While International Financial Reporting Standard (IFRS) 17 provides little guidance about coverage units and the contractual service margin (CSM), insurers may be able to find quick but reasonable choices from current modeling philosophy or certain existing standards such as U.S. GAAP. Insurers should carefully examine the consequences and reasonableness of those choices in light of the characteristics of their businesses, as coverage units are very important factors for determining the future profit signature under IFRS 17. Milliman’s Takanori Hoshino, Kurt Lambrechts, Sjoerd Brethouwer, and William Hines provide perspective in this paper.
According to the Indonesia Insurance Statistics published by the Financial Services Authority, the Indonesian life insurance industry continued to expand in the third quarter of 2017. For the first nine months of 2017, the industry recorded a total net premium income of IDR 127.07 trillion, a 38% growth year-on-year compared to the same period in 2016. The total technical reserve for the industry as of the third quarter increased by 31% year-on-year to IDR 372.25 trillion. Milliman’s Richard Holloway, Halim Gunawan, and David Kong offer more perspective in the latest Indonesia Life Insurance Newsletter.
The Tax Cuts and Jobs Act was signed into law in December. Tax reform will lead to either changes in projected profitability, changes in product design or pricing, or both. In this analysis, Milliman actuaries measure the impact of the tax code changes on a range of different insurance product types.
The group life and disability insurance sector has been slower to adopt predictive analytics than other lines of insurance. One reason for the sector’s lag is because insurers often have limited information on who they are insuring. However, there are still many ways to incorporate predictive modeling technology to improve results. Milliman consultant Jennifer Fleck provides some perspective in her article “Group insurance ‘Project Insight’.”
Flood is one of the most devastating catastrophic perils, in which a single event can create tens of billions of dollars of loss. It is also one of the least insured perils, affecting people in every part of the United States. Advanced risk models now provide granularity, assessing flood risk at local levels. Such technological development presents insurers the opportunity to offer affordable, risk-based coverage within a private insurance market. Milliman colleagues Nancy Watkins, Matt Chamberlain, Andrei Stoica, and Garrett Bradford offer perspective in this video.
To learn more about Milliman’s flood expertise, click here.