Ifrs 17 insurers should develop business plan naicom

A very specific and technical question!

IFRS 17 is an international financial reporting standard that sets out the requirements for insurance contracts. It was issued by the International Accounting Standards Board (IASB) in 2017 and is effective for annual periods beginning on or after January 1, 2023.

For Nigerian insurance companies, the National Insurance Commission (NAICOM) has issued guidelines on the implementation of IFRS 17. In fact, NAICOM has mandated that all insurance companies in Nigeria must adopt IFRS 17 for their financial reporting from 2023 onwards.

To develop a business plan that complies with IFRS 17, insurers in Nigeria should consider the following key areas:

  1. Business Model: Review and refine the company's business model to ensure it is aligned with the requirements of IFRS 17. This includes identifying the company's insurance contracts, determining the premium and claims liabilities, and assessing the impact of changes in market conditions on the company's financial performance.
  2. Insurance Contracts: Identify and classify the company's insurance contracts as either "insurance contracts" or "financial instruments" under IFRS 17. This will determine how the contracts are measured and recognized in the financial statements.
  3. Premium and Claims Liabilities: Calculate the premium and claims liabilities for each insurance contract, taking into account the contract's terms, market conditions, and other relevant factors.
  4. Discount Rate: Determine the discount rate to be used for calculating the present value of the premium and claims liabilities. This rate should reflect the company's expected return on investment and the market's expectations of future returns.
  5. Risk Adjustment: Apply a risk adjustment to the premium and claims liabilities to reflect the company's exposure to various risks, such as market risk, credit risk, and operational risk.
  6. Financial Reporting: Prepare the company's financial statements in accordance with IFRS 17, including the balance sheet, income statement, and cash flow statement.
  7. Disclosure Requirements: Ensure that the company provides the required disclosures in its financial statements, including information about the insurance contracts, premium and claims liabilities, and risk management practices.

By following these steps, insurers in Nigeria can develop a business plan that complies with IFRS 17 and provides a comprehensive overview of their financial performance and position.

Here is a sample business plan template that insurers in Nigeria can use as a guide:

Business Plan Template for IFRS 17 Compliance

Executive Summary

[Insert a brief overview of the company's business model, insurance contracts, and financial performance]

Business Model

Insurance Contracts

Premium and Claims Liabilities

Discount Rate

Risk Adjustment

Financial Reporting

Disclosure Requirements