IFRS 17 by Wonda Consulting

IFRS 17 model summarized

IFRS 17 introduces grouping, new definitions and measurement models. Below is a concise overview.

Grouping

Contracts are grouped by portfolio and profitability (profitable/onerous/may become onerous) by annual cohort. Offsetting results across groups is not permitted.

Grouping the insurance contracts
IFRS 17 grouping explained.

Key definitions

  • Expected cash flows: Unbiased, probability-weighted estimates of inflows/outflows (premiums, claims, expenses).
  • Discount rate: Reflects time value of money and financial risks.
  • Risk adjustment: Compensation for non-financial risk.
  • CSM: Contractual service margin — expected unearned profit; onerous groups have a loss component instead.

Measurement models

General Measurement Model (GMM/BBA)

Recognise fulfilment cash flows (discounted), risk adjustment and CSM/loss component on balance sheet; release CSM to P&L as service is provided. No day-1 profit.

The IFRS 17 model
GMM explained.
The GMM Balance Sheet
GMM presentation on the balance sheet.

Premium Allocation Approach (PAA)

Simplified approach for eligible short-duration or qualifying groups; claims measurement aligns with GMM while coverage period uses a simplified liability for remaining coverage.

The PAA Balance Sheet
PAA presentation.

Variable Fee Approach (VFA)

Applied to contracts with direct participation features; subsequent measurement differs as the insurer’s fee varies with underlying items.

The VFA Balance Sheet
VFA presentation (based on IASB material).

Wonda Consulting

We help banks and insurers translate complex regulatory frameworks — IFRS 17, IFRS 9, Solvency II and ESG — into clear data models, reporting chains and actionable dashboards. With over 10 years of experience across Finance and IT, we bridge the gap between strategy and implementation.

Achmea

Implemented a new IFRS and Solvency II reporting chain including controls and dashboards.

Aegon

Adjusted MRAP, Solvency II and SOx controls to comply with new regulations; supported multiple reporting periods.

ASR

Supported integration of data streams between ASR and Aegon.

Reporting knowledge

Years of insurance reporting experience: accounting policies, bookkeeping and IFRS 17 reporting.

Business analysis

Certified in analysis frameworks (e.g., BABOK / BCS). We translate IFRS into clear requirements and data elements.

Technical skills

Data warehousing and engineering expertise to design pragmatic, robust implementation strategies.