Liability Calculations

The liability arising from insurance contracts under IFRS 17 has to be considered in the books of accounts. The net liability is calculated by using the present value of the cash flows of the contract, risk adjustment, and assumption. The computation logic configured in the calculation templates linked to the liability run will be used for computing the IFRS17 estimates including the roll forward. (add the write-up here) The liability calculations allow you to set up the level of aggregations, the assumptions, and the method that will be considered for the calculation of the net liability for each of the contracts under the level of aggregation. This can be performed once the level of aggregation and assumptions are created. The same run can be executed for each reporting period, which calculates the CSM, net liabilities, and so on, for the respective reporting period.

After setting up the level of aggregation, the assumption set per level of aggregation, and calculation preference, you can execute the calculation for all the selected levels of aggregations selected per calculation method. The liability calculation is triggered and the output is generated and then used to generate the IFRS17 reports.

You can provide multiple scenarios for performing the IFRS17 executions. Each scenario can be marked as either a base scenario or what-if analysis or scenario for onerous classification.

The base scenario will be used for calculating the actual results on the execution date. The onerous classification scenarios are used for calculating the onerous classification at inception. The what-if analysis will be used in calculating the IFRS17 liability trends for the current period and future periods that will, in turn, be used for comparison and other management purposes. The calculation results from the base scenario will be used for accounting.