We are introducing the new IFRS 17 accounting standard that came into force on 1 January 2023. IFRS 17 brings more transparency, comparability, and alignment to the way insurance companies explain their financial performance.
It’s important to understand that IFRS 17 does not mandate the way we do business - we’re still the same, strong, stable company. The new standard simply improves the transparency of the reporting of our financial performance, making sure it’s clear, simple, and easy to understand by our brokers, clients, investors, and people.
What are we doing?
We’re adapting some of our accounting calculations to meet the new rules, and in our future financial reporting, you’ll see robust detail about how we arrived at the results.
Simply put: our numbers stay the same, but the way we report them will be different, making it easier to understand our performance.
What’s our plan?
We’re working on the detail; we’ve created a new platform to manage the data and we’ve updated our policies and processes to make sure everything is in place for our Interim Report which will be released in September.
We continue to hold sessions with our analyst community to walk through the new look reporting and explain the main changes. You can find these recordings and associated slide packs in our Presentations section.
IFRS 17 Investors Pack
We have released an IFRS 17 Investors Pack that sets out, in detail, our methodology, the new calculations, and gives an insight into what to expect in the Interim Report. You can find the Pack in our Presentations section.
What is staying the same?
We are the same, strong, stable company we’ve always been. IFRS 17 will not mandate the way we do business, only the way we report our financial performance.
IFRS 17 does not impact our ability to write business and the strategy we set out in our 2022 Annual Report remains the same. We will continue to manage our business with our values at the forefront.
IFRS 17 does not have any impact on our dividends. Our dividend policy, as set out in our 2022 Annual Report, remains the same.
Our new accounting model – using GMM
IFRS 17 allows three models to be used and we have chosen the General Measurement Model (GMM).
Why did we choose this model?
We have a complex business – so when deciding on the best model, we completed a detailed analysis and agreed that the GMM suited our business best.
The GMM is the default model under IFRS 17 and, as it is applicable to both short-term and long-term contracts, it works well for the way we do business today and will support our future growth plans.
While it is a more complex model to implement, as a specialty insurer with multiple operating platforms, it will deliver the flexibility we need across our business without the additional changes and double working that other models require.
Why is this a good model for our investors?
The GMM model ensures a high level of transparency and simplicity on our Profit and Loss statement and Balance Sheet.
We will be required to disclose more detailed information on our calculations, predicted future financial performance, risks and judgements applied in our reporting, giving investors additional confidence. You should also find it easier to compare us to other financial and non-insurance companies.
You can find more information on the changes that IFRS 17 will bring to our financial performance in the IFRS 17 Investor pack and our RNS statement.