Page 196 - India Insurance Report 2023- BIMTECH

184 India Insurance Report - Series II

the entity reasonably expects that doing so would produce a reasonable approximation of the general
model, or the coverage period of each contract in the group is one year or less.

2.3.Presentation in the Statement of Financial Performance

An entity shall disaggregate the amounts recognized in the statement(s) of financial performance
into an insurance service result comprising insurance revenue and, insurance service expenses, and
insurance finance income or expenses. Income or expenses from reinsurance contracts held shall be
presented separately from the expenses or income from insurance contracts issued.

An entity shall present in profit or loss revenue arising from the groups of insurance contracts
issued and insurance service expenses arising from a group of insurance contracts it issues, comprising
incurred claims and other incurred insurance service expenses. Revenue and insurance service expenses
shall exclude any investment components.

2.4.Transition

An entity shall apply the Standard retrospectively unless impracticable, in which case entities have
the option of using either the modified retrospective approach or the fair value approach.

3. Post Implementation Ind AS 117

It is important to reiterate that Ind AS 117 is not merely a discrete change in accounting. It also
creates a complex end-to-end change for insurers involving actuaries, accountants and IT/data teams
needing to work collaboratively to create functional yet effective Ind AS 117 solutions. This will be a
driving force that will change the operational and financial reporting landscape of the insurance companies.

Despite the challenges in this new standard, there are also recognizable opportunities that present
themselves with this overhaul and with realizable benefits beyond just ‘strict compliance’.

3.1. Strategy, Financial Planning, Reporting and Analysis

The Standard creates the opportunity to reassess not only financial or reporting processes but also
the product, channel, reinsurance, and market strategy, as well as pricing. Ind AS 117’s financial impact
assessments will enable the finance and the actuarial personnel to collaborate with the business and
adopt a forward-looking approach to refine the business strategy.

With greater emphasis on transparency and a granular level of detail, Ind AS implementation will
create an opportunity to bring significantly more insights and better analysis for the finance and actuarial
functions of the insurers.