Insurance Accounting Advisory Quarterly June 2025

As insurers complete their second year of reporting under IFRS 17 and IFRS 9, the 2024 annual financial statements provide valuable insight into how the market is maturing in its interpretation and implementation of the standard.

While measurement principles have remained consistent, we continue to see refinements in accounting policies, judgements and disclosures with insurers providing more clarity and company-specific detail. We note that the level of detail within the disclosures still varies, however, these refinements have assisted with understandability and comparability of the disclosures across the insurance industry.

Additionally, we note that insurers continue to assess the applicability of their key performance indicators (“KPIs”). With insurers incorporating IFRS 17 elements into their KPIs, insurers need to start considering the implications of IFRS 18.

Trends in IFRS 17 reporting practices

The KPMG Global IFRS Institute have analysed the published financial statements of 55 insurers across various jurisdictions and includes life, non-life and composite segments. This year’s analysis focuses on the ongoing trends in IFRS 17 reporting practices, and highlights areas where diversity in application continues to emerge. Our key observations focused on:

IFRS 17 accounting policies, significant judgements and disclosures as well as changes thereto;
Insight on discount rates, risk adjustments and the contractual service margin;
The development and application of IFRS 17-related KPIs;
The potential implications of IFRS 18 for performance reporting going forward.

The key observations arising from our analysis included the following:

Accounting policies, judgements and disclosures
- Differences in accounting policy choices and judgements applied result in differences in the measurement of insurance contract liabilities.
- Improved clarity and company-specific disclosures, such as those pertaining to classification, discount rates and coverage units.
- Ongoing variation in the level of detail where some insurers continue to rely on boilerplate language in their disclosures.
- A shift towards updating assumptions as implementation matures, with some insurers disclosing changes in IFRS 17 accounting policies, judgements or estimates.
KPIs
- Alternative profit metrics like ‘operating profit’ remain widely used but vary in definition and scope.
- Life and health insurers; as well as composite insurers are more likely to incorporate the contractual service margin in their KPIs to analyse profitability and value creation.
- Non-life insurers continue to rely on adjusted combined ratios that integrate IFRS 17 components, however, methodologies differ between insurers.
- Comparison of KPIs across insurers remains a challenge.