IFRS 9 provisioning: lessons learned and challenges to come

Kennisbank •

As many may know, IFRS 9 Financial Instruments (IFRS 9) has a mandatory effective date of 1st of January 2021 for insurance companies. Linked to a potential delay in IFRS 17 Insurance Contracts, this date may be pushed back.

IFRS 9 provisioning: lessons learned and challenges to come

Nonetheless, for other financial institutions this standard is already effective since 1 January 2018 and some insurers have started their implementation activities some time ago already. Thus, lessons can be learned from
the work done by banks and insurers up to now.


This article focuses on the IFRS 9 provisioning (i.e. impairment) experiences to date and on the current discussion around interest rate only (IO) mortgages from an IFRS 9 perspective. This topic is a hot topic within credit risk from both a provisioning as capital perspective and is of that much interest to society that the Dutch banking association and the Dutch
association of insurers have initiated an awareness campaign because of the potential risks for consumers. As the impairment model landscape
becomes more complex and choices within IFRS 9 and IFRS17 impact each other, creating awareness of the choices made in the provisioning on both sides of the balance sheet should be part of the actuary’s agenda.


Continue reading this article under Download.

Over de auteur

Tom van der Vorst MSc AAG FIA

is Associate Director Risk Modelling Services PwC UK.