Calculation Preferences

One of the core requirements of IFRS17 is to calculate the insurance liabilities in such a way that each component of the liability is segregated explicitly so that those are visible to you. For example, in the General Measurement Model, the entity is asked to distinctly provide the best estimate of liability cash flows, the effect of discounting, the risk adjustment performed, and the best estimates. Further to this requirement, the entity is also required to study the movement analysis of each of these breakups between each reporting date.

As a mandate from IFRS 17, Insurance companies are required to provide the disclosures for every reporting period. IFRS 17 requires specific disclosure about the nature of risks from insurance contracts, any assumptions or judgments made, and the actual amounts recognized in the financial statements. However, IFRS 17 has specified the approach from a broader perspective which can be implemented in different ways by each organization.

The Calculation Preferences window enables insurance companies to define the required formulas to arrive at the contractual service margin, net liability, and loss components in their way, based on various parameters and variables. This provides the ability to implement the disclosure requirements according to the processes and assumptions. The application provides a default set of formulas as well.