Reinsurance Contracts Held

A reinsurance contract held cannot be considered onerous by applying IFRS 17. Therefore, the requirements for dividing a portfolio into groups are modified for reinsurance contracts held. For a group of reinsurance contracts held, an insurer expects either to incur a net cost of purchasing the reinsurance or, sometimes, make a net gain from purchasing the reinsurance. Applying the grouping requirements to reinsurance contracts held, at a minimum, a portfolio is divided into the following:

A group of contracts on which there is a net gain at initial recognition if any.

• A group of contracts on which at initial recognition there is no significant possibility of a net gain arising subsequently if any.
• A group of remaining contracts in the portfolio if any.

For some reinsurance contracts held, applying the requirements in IFRS 17 will result in a group that comprises a single contract.