IFRS 9 for insurers: Five considerations that remain important despite the deferral to 2023

by Richard Goodman Senior Manager

Email +44 (0) 7730 598929

by Kathryn Le Coz Senior Manager - accounting advisory

Email +44 (0)7725 632 974

The IASB recently decided to defer the adoption of IFRS 17 for a further year until 1 January 2023 and agreed to extend the temporary exemption from IFRS 9 until the same date. Although much of the focus of the additional year is likely to be on IFRS 17, it is important to consider interactions with IFRS 9. 

We have summarised five key IFRS 9 considerations below:

Interactions between IFRS 17 and IFRS 9

Given the need to update your IFRS 17 implementation plan following the deferral, now is the perfect time to ensure that IFRS 9 and IFRS 17 are aligned. Links between IFRS 17 and IFRS 9 projects include the use of other comprehensive income under both standards and specific implementation activities, such as new disclosures and chart of accounts requirements. It is also worth considering which elements of IFRS 9 implementation will be completed internally and which will require external providers.

Scope of IFRS 9

Although IFRS 9 will have the biggest impact on assets backing insurance liabilities, other assets are also in scope. These include non-insurance and intercompany receivables, investment contract liabilities and distinct investment components separated from insurance contracts under IFRS 17.

Although the IFRS 9 deferral has been extended, identifying what is in scope now will provide an outline of the extent and timing of implementation work required.

If applicable you should also consider whether to adopt the IFRS 9 hedge accounting requirements or take the option to continue using IAS 39.

Classification and measurement

Business model assessments should be completed and documented as soon as possible for all assets within scope of IFRS 9. The business model determines how assets are measured, which is particularly important for assets backing insurance liabilities.

Insurers who plan to hold assets at amortised cost or FVOCI will have tested their existing portfolios against the ‘solely payments of principal and interest’ (SPPI) criteria for IFRS 9 deferral disclosures. Those planning to designate assets at FVTPL need SPPI information for disclosure purposes from 2023 onwards so have more time to complete testing activities. Testing the existing asset portfolio is likely to be a significant exercise for insurers and a variety of approaches are available. Furthermore, new controls and processes are needed to ensure that new assets purchased after 1 January 2023 meet the SPPI criteria.


Assets held at amortised cost or FVOCI are subject to impairment, which must be calculated on an expected credit loss basis under IFRS 9. While most focus will be on the calculation of expected credit losses on financial investments backing insurance liabilities, assets such as non-insurance debtors and intercompany receivables are likely to be subject to impairment but a more simplified model may be appropriate. Development and testing of an impairment methodology for each type of financial asset held at amortised cost or FVOCI should begin as soon as classification and measurement decisions are completed.

Data and disclosures

While making the decisions outlined above, it is important to consider data requirements for IFRS 9 and IFRS 17, including increased capacity and functionality. 

It will be beneficial to develop the new disclosures required by IFRS 7 and chart of accounts alongside the corresponding activities for IFRS 17.

The restatement of comparatives on transition is optional under IFRS 9 but mandatory under IFRS 17. Consider the implications of restating comparatives under IFRS 9 if that option is elected, including the impact on the implementation timetable as it is only permitted without the use of hindsight.

If you would like to discuss any element of IFRS 9 for insurers, please do not hesitate to contact us or reach out to your local PwC contacts.

by Richard Goodman Senior Manager

Email +44 (0) 7730 598929

by Kathryn Le Coz Senior Manager - accounting advisory

Email +44 (0)7725 632 974

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