Expert view: IFRS 17 in practice: stabilisation, divergence and the road ahead

As we celebrate this anniversary milestone in Romania, we continue that tradition by looking ahead - at how IFRS 17 is reshaping insurance reporting beyond its initial implementation phase.

In a recent study, `Redefining financial frontiers: CEE strategic resilience in banking: outlook 2025`, our colleague Otto Ovidiu Strasszer, Regulatory Reporting Director, shares his expert perspective on the evolving application of IFRS 17. This article connects global observations with regional realities, reflecting Otto’s hands-on experience supporting insurers through regulatory change. His analysis highlights where the standard is delivering greater transparency, where divergence persists and what lies ahead as insurers move from implementation to optimisation.

Two years after the introduction of IFRS 17, the global insurance industry is entering a period of relative stabilisation. While early implementation challenges are easing, differences in interpretation and application across markets and business models continue to influence reported performance and limit comparability.

The International Accounting Standards Board (IASB) has not yet proposed formal amendments to the standard, but its ongoing post-implementation review is collecting feedback globally, with potential guidance or refinements expected in 2025 or 2026. In the meantime, insurers are shifting their focus from large-scale transformation to optimising models, systems and disclosures.

The IFRS 17 Benchmark Study 2025 by Forvis Mazars, based on 2024 financial statements from 23 major insurers and reinsurers, highlights growing consistency in the presentation of IFRS 17 metrics. However, significant divergence remains in key judgement areas, including discount rates, risk adjustments and contractual service margin (CSM) methodologies, continuing to challenge comparability.

Business model differences remain pronounced. Life insurers typically emphasise the CSM as a core indicator of long-term profitability, supported by detailed disclosures, while non-life insurers continue to rely on the combined ratio as their primary performance metric, even though with varying definitions. Regulators, particularly in Europe, are calling for greater transparency around critical assumptions such as coverage units and CSM dynamics, although market responses remain uneven.

Despite macroeconomic uncertainty, new business profitability has remained resilient, with positive CSM generation and limited loss-making new business across the benchmarked insurers. At the same time, reinsurance continues to present complexity, with differing accounting approaches contributing to volatility in reported results.

In Central and Eastern Europe, IFRS 17 adoption remains uneven, with consolidated reporting often under IFRS while statutory financial statements frequently continue to be prepared under local accounting standards.

Overall, IFRS 17 is becoming embedded in business-as-usual reporting, but its objective of full comparability has yet to be realised. Continued engagement between insurers, regulators and standard-setters will be essential to enhance transparency, consistency and confidence in insurance financial reporting.

Forvis Mazars sees IFRS 17 as a catalyst for insurers to strengthen transparency and long-term decision-making. Those who actively address remaining divergences, optimise reporting processes and align with evolving regulatory expectations will be better equipped to deliver consistent performance insights and build lasting resilience in an increasingly complex market.

Read the full view here.