IFRS 17 requires insurers to set appropriate discount rates for liabilities. Whilst IFRS 17 sets out broad principles, there are many techniques and methods that could be used to set suitable rates. The working party will consider the different ways discount rate mechanisms might operate, how actuaries may set up an appropriate framework, and draw attention to some of the advantages and disadvantages that might be encountered in practice.
Key objectives:
- Compile and review current literature in the life insurance arenas to ensure access to up-to-date information.
- Consider the pros and cons of different methods for setting discount rates.
- Provoke thought leadership and innovation within the industry through presentations and forums to gain wider input.
Key outputs:
- Presentations at conferences
- A range of articles (see below)
Articles in The Actuary, other publications, and in other forums.
Articles published to date include:
- IFRS 17 KPIs – Potential Interactions with the Discount Rate, by Jon Neale
- ALM for IFRS 17 Balance Sheet, by Jon Neale, Richard Schneider, and Apostolos Papachristos
- IFRS 17 – Default Model – Historic Calibration by James Sharpe
- The IFRS 17 Income Statement and how this is affected by the Discount Rate Methodology, by Jon Neale
- Other Financial Risk under IFRS 17, by Richard Schneider and Jonny Skerratt
- Summary of the Draft Educational Note on Discount Rates Issued by the Canadian Institute of Actuaries, by Jon Neale
- Index-linked liabilities under IFRS 17 – considerations, by Darren Clay and Richard Schneider
- Imperfect numbers under IFRS 17 by Kunj Behari Maheshwari & Brian Ring
- Setting ‘bottom-up’ discount rates under IFRS 17 for General Insurers, by Charlotte Edwards and Apostolos Papachristos
- A summary of the issues the working party is considering
- A balancing act: Companies should not assume their existing discount rate approaches will comply with IFRS 17, warns Daryl Boxall
- IFRS 17 Discount Rate Considerations, by Darren Clay & James Latto
- Locked-in stochastic discount rates under IFRS 17, by Richard Schneider
- Case study on the top-down approach, by Apostolos Papachristos
- IFRS 17: liquidity characteristics of insurance liabilities, by Thomas Bulpitt
- Discount rate disclosures, by Jon Neale
| Chair: | Richard Olswang |
|---|---|
| Membership: | 14 |
| Established: | 2018 |
Contact Details
If you want more information about this research working party please contact the Communities Team.
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Events calendar
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Pensions Winter Forum: Corporate Transactions
25 January 2022
Over recent months there has been a sharp rise in M&A activity involving British businesses, with interest from overseas, domestic buyers and Private Equity investors. -
Frank Redington is recognised as one of the most influential actuaries of all time. In this talk, Craig will review some of Redington's most important ideas. He will identify the consistent actuarial principles that form a common thread across the contributions Redington made to a broad range of actuarial fields, and will highlight the ongoing relevance of Redington's thinking to 21st century actuarial practice.
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The IFoA Mental Health working party look back over their week of blogs and podcasts considering all aspects of the relationship between mental health and life insurance. The expert panel spans adviser, underwriter and actuarial experience and they explore triggers for purchasing insurance relating to mental health, the various routes to insurance and how these may be more suited to different people depending on their conditions and preferences, the products and processes involved in purchasing these as well as what claims and support are available to policyholders and how to access them.
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Part of the 'Finance in the Public Interest 2022' webinar series. If it was ever okay to consider your business in isolation from its surroundings, today it most definitely is not. Thinking about business within its surrounding system is now a necessity. The question we seek to discuss is: How should we prescribe the boundaries in which we consider problems to enable us to create better products and more resilient companies and systems?
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ARC Webinar - The next generation of CDC pensions? Analysing a post-retirement retirement vehicle
18 February 2022What will happen to DC pension savers who see life annuities as poor VFM but still want an income for life? Pooled annuity funds could offer them a decent lifetime income while reducing significantly the complex choices and risk inherent in income drawdown. They could be the next generation of CDC pension schemes, slotting into the existing DC framework as a post-retirement option.
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ARC Webinar Series 2022 - Lifting the lid on intergenerational investment risk-sharing
24 February 2022Investment risk-sharing is a fundamental part of whole-life collective defined contribution (CDC) pension schemes, such as the Royal Mail CDC. But how does investment risk-sharing benefit members? And does it favour some groups of members over others?
Over recent months there has been a sharp rise in M&A activity involving British businesses, with interest from overseas, domestic buyers and Private Equity investors.