信用Q＆A：IFRS 17会影响保险公司的信用质量吗？

When will IFRS 17 take effect?It comes into force in 2021, and for the world’s insurance companies it’s the biggest change in accounting standards in perhaps 20 years. For companies moving to IFRS 17 from IFRS 4, the rule’s complex and costly changes to the reporting of profits and losses as well as balance sheet presentation can increase financial transparency, though with potential for great volatility in results. Insurers should probably start now to manage the transition through increased external communication to ensure broad acceptance among investors and other stakeholders. IFRS 17 is a potential change for the better, for example, through the retrospective approach that calls for a deep-dive analysis of the life insurance back book. Yet there are risks to implementation and to the level of dependency on company-specific assumptions.

As a result of IFRS 17 implementation, will you change your ratings on insurers?We anticipate limited rating changes from IFRS 17 itself, as an accounting change should all else being equal not necessarily reshape the fundamental risk of insurance operations nor our view of central aspects in our rating assessment on insurers, such as risk-based capital adequacy and relative operating performance in the competitive landscape.

The change in reported shareholder’s equity should not fundamentally alter our view of risk-based capital adequacy. We continue to maintain an economic view of insurers’ balance sheets in our current analysis of risk-based capital adequacy. For example, in our analysis of capital, we don’t allow for unrealized gains between market value and book value on bond investments if the invested funds are coming from life insurance, as liabilities are on a book value basis only under the current IFRS 4 phase I. IFRS 17 is removing this mismatch between assets and liabilities and moving them both to a market basis.

Our view of operating performance relative to competitors or peers plays an important factor in our rating assessment, as we regard it as an indicator of competitive strength or weakness. Existing operating performance metrics like return on equity (RoE) might deliver results that run in different directions from Jan. 1, 2021. Consequently, we see the need for insurers to develop a new set of operating performance metrics to ensure consistent comparability. Such measures could include margin (versus volume) measure for profitability for the contractual service margin (CSM) insurance liabilities or CSM insurance revenues. The accounting change will also lead to a new set of KPIs in insurance management. However, some existing performance measures like return on assets (RoA) for life insurers and return on revenues (RoR) for non-life insurers might just need an adjustment in the calculation.

We expect some insurers’ capitalization to weaken due to full market valuation of liabilities under IFRS 17. That said, the insurers will likely manage their portfolios and pre-emptively build more of a capital buffer toward 2021. In that way, we think the market-consistent view of liabilities under Solvency II puts insurers in the European Economic Area (EEA) ahead of the curve.

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What is your view about the impact of IFRS 17 on the timing of realization of profits over the lifetime of insurance contracts?在第一次申请IFRS 17时，保险公司将不得不为如何为他们如何对其商业书籍进行分类的决定，以便报告资本和CSM等。例如，保险公司 - 特别是生命的公司 - 将不得不将背记内的合同分类为繁重的，而不是繁重，而且潜在的繁重，以便报告他们正在进行的利润。这在不同的公司如何分类和报告可能类似的商业书籍中，这将打开大门。我们预计潜在的潜在假设和预期收入路径的透明披露。我们了解到，基础资本实力和产品组合的盈利能力不会在一夜之间根本改变。提供的保险公司在首次申请前提供及时透明的沟通，我们不会预计除非潜在资本质量较为重大劣质的经营业绩和资本，否则我们将无法改变。

Any lack of transparency might result in prudent estimates from external stakeholders. What’s more, the new KPIs as well as the capital and operating performance metrics require timely, detailed, transparent disclosure that external stakeholders will accept, in our view. We hope that over time, a consensus will emerge about exactly what is needed. Regardless, given a sufficient amount of detail and granularity of disclosure, we believe our prospective rating assessment of insurers will remain largely unchanged.

How do you address some losses to comparability and consistency that IFRS 17 might introduce?我们认为IFRS 17可能会增加保险报告的透明度和可比性。注意，在人寿保险方面，第一次规则要求市场一致的资产和负债展示。

但是，随着一些众所周知的资产负债表和损益账户项目，如优质收入和技术开支，保险公司之间的可比性，报告国际财务报告准则和本地法定GAAP下的报告。

这不应该是标准普尔全球评分的问题，因为在我们的评级分析中，我们已经确保了在不同会计系统下报告的公司之间的一致性。在全球范围内使用我们的风险资本模式，对于报告IFRS，本地，法定GAAP和美国GAAP的保险公司，我们调整报告的数字，以确保有基于风险的资本充足性的一致性观点。例如，我们在我们对总调整后的资本（TAC）的看法中，我们允许高达50％的寿命生存权，并允许在某些司法管辖区内吸收损失的保单持有人奖金储备。

我们可能需要调整在几个操作指标cases. As our assessment of competitive position is built around our view of relative operating performance versus peers, we would expect most peer groups to comprise those reporting under similar accounting principles. However, where a peer group consists of companies reporting under different accounting regimes, or using different assumptions in their application of the principles, we would expect to adjust for these to the extent possible to carry out our assessment.

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您是否期望保险公司的资金成本更改物质？Although we are not entirely clear, with the switch to IFRS 17 we believe funding costs could possibly rise – but presumably not enough to materially affect our ratings on insurers.

虽然IFRS 17的目的似乎是保险公司与企业账户的更高程度的可比性，但在IFRS下没有报告的保险公司的一些可比性可能会丧失。在我们看来，保险部门的复杂性不会随着新的会计标准消失。通道投资者可能会继续依赖专门提供保险的金融分析师。然后，专业投资者必须使用一组新的指标，并可能更新他们的数据库和估值工具。

How could IFRS 17 trigger changes to insurers’ ratings?As noted, we consider it unlikely that the accounting change in itself would trigger any rating changes. However, there could be second-order effects that result in S&P Global Ratings changing views about prospective capitalization. Should that occur, we many need to review the rating.

对现有和开发新KPI的调整可能会影响管理，进入或退出业务范围或改变风险概况。资产和负债之间的遗产不匹配的影响将在IFRS 17中更加明显。欧洲欧洲央章的保险公司，偿付能力二年，已经接受了债务的市场一致的观点，可能面临这方面的变化。为了减轻影响，保险公司可能会采取更为纪律的投资策略来管理他们的资产和责任不匹配。因此，有针对性的盈利能力或资本充足，或公司的战略可能会改变重大。

We view the impact of IFRS 17 implementation to be relatively more significant for Korean insurers. This reflects insurers’ negative spread stemming from legacy high-yield guarantee policies (especially for life insurers). To prepare for IFRS 17, some South Korean insurers have raised new capital as part of their proactive capital management policy to ensure sustainable capital buffers. This comes on the back of their refinement of product strategies to focus on insurance protection policies with limited interest rate guarantees.

Is the cost of IFRS 17 implementation potentially rating negative?As the standard seems to be most complex for life insurers, we would assume a considerably higher cost than for non-life insurers. The retrospective approach, requiring an in-depth analysis of existing contracts in the back book by cohort of new business--sometimes over many decades – might be one of the most complex parts of the new standard. Although some market rumors cite costs of IRFS 17 implementation in line with those for Solvency II in the EEA, we believe they will not be material relative to risk capital. In addition, the temporary burden to earnings generation over 2018-2021 is not likely to affect our view about operating performance, as we focus on a prospective view of underlying performance.

For Asia-Pacific, the implementation of IFRS 17 could prove daunting for all insurers, but especially for small and midsize companies. The operational burden of incorporating new accounting infrastructure changes, alongside updates in regulatory frameworks, will further weigh on compliance expenses.

Do you expect any change to the Jan. 1, 2021, implementation date?此外，IFRS 17 IASB公告于2017年出现，没有以前的定量影响研究，2021年1月1日实施的时间非常短暂。与2010年IFRS 4阶段II的IFRS 4阶段I曝光草案的第一次尝试不同，我们不会指望对时间表进行任何改变。虽然2010年的曝光草案已被保险业和投资者推迟，但该标准，在此期间重命名为IFRS 17而不是IFRS 4第4阶段，已被接受在若干国家通过。In Asia-Pacific, Korea, Australia, Hong Kong, New Zealand, and Singapore have announced the adoption of IFRS 17 from 2021. India’s planned implementation of Ind AS, which we anticipate to largely converge with IFRS, will be effective from April 1, 2020.

IFRS 17 is to be adopted by insurers globally, except those reporting under U.S. GAAP and those solely reporting under local, statutory GAAP. Listed insurance groups in most jurisdictions are required to report under IFRS. While the EU endorsement process potentially might allow for additional time to adopt, we expect other regions and EU-based global multiline insurance and reinsurance groups to adopt in time and start much earlier with educating the market about the change. It also appears important that insurance associations and other forums discuss communication and disclosure to avoid inconsistent messaging from the industry.

Why do you believe that transparency of disclosures is so important?A prerequisite for the comparability of insurance accounts under IFRS 17 will be consistent application of the standard as well as the transparency of underlying assumptions, including discounting factors. IFRS 17 is based on many underlying assumptions, including clustering in the retrospective approach. To familiarize internal and external stakeholders with the new KIPs and potentially materially different absolute numbers for capital and earnings, early communication internally and externally seems key. We would expect insurers to greatly increase their communication to the market and granularity of disclosure over the course of 2019 and 2020.

An object lesson is market-consistent embedded value, which was introduced with high hopes regarding consistency. However, that goal has not been fully achieved and the investor community hasn’t to date embraced the metric. We hope insurers will do a better job regarding IFRS 17.