Your experience with IFRS17 over the past couple of years likely depends on the insurers you’ve been closest to—whether they’re predominantly using PAA, GMM, or VFA approaches.

The differences between the General Model (GMM) and the Variable Fee Approach (VFA) can be substantial. VFA does away with the awkwardness of locked-in rates on CSM and the resulting accounting mismatches as interest rates drift up and down over time. This can significantly affect the presentation of profitability and financial position.

While IFRS17 has removed some inconsistencies, it has introduced others, including multiple definitions of operating profit. I’ve seen references to at least 10 variations, which is unhelpful.

During a recent InsuranceERM conference in London, only 30% of the audience felt that IFRS17 had led to improved comparability and consistency.

I don’t believe comparability within a single country has necessarily improved, but IFRS17 may have better aligned reporting practices across different countries. However, opinions on how much consistency has improved may vary depending on your perspective.

If you zoom our far enough, all the differences disappear. But up close, the departures are key.