IFRS 17 is now fully in force and all major UK listed insurance companies reported under the new standard for their 2023 annual financial reports. Our previous publication outlined the key impacts from the transition to IFRS 17 and we noted the difficulties in making comparisons across insurers at that stage due to varying levels of disclosure for interim 2023 reporting and due to differences in approaches. This report covers our analysis of financial statements at FY23, outlining any new trends that have emerged and any similar themes to our findings at interim 2023.
Our report compares the disclosures made by 10 of the largest UK life insurers and 18 general insurance companies that have a major presence in the UK market. Our analysis shows that there is limited new information on the key judgements at transition to IFRS 17 and the overall impacts (including comparatives) are well aligned to what was disclosed at interim 2023. Despite certain disclosures being mandatory at FY23, as expected, we still observe divergences in approaches, calibrations and in the level of granularity adopted. Some of the additional disclosures at FY23, such as the CSM maturity analysis, provide helpful information to stakeholders and we expect it to continue to receive attention in future periods.
From a KPI perspective, adjusted operating profit (AOP) and adjusted equity continue to be key metrics for life insurers. The combined ratio (COR) continues to be one of the main metrics used by GI companies, albeit on a discounted basis and with varying definitions. We don't expect insurers to make wholesale changes to these KPIs over the short term as we expect they will want stakeholders to familiarise themselves with the new reporting. Over time though, we may see some convergence in approaches or calibrations.
Download the report today to read our detailed analysis - including deep dives by market, a detailed comparison of company disclosures, and thoughts on the key next steps for insurers.
