Analysis of the impact of ED 5 on the insurance industry

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10 Sep 2003

Standard & Poor's, the securities analysis and ratings agency, has published a report, International Accounting Standards: Threat or Opportunity?, analysing the potential impact of the IASB's Exposure Draft 5, Insurance Contracts on the insurance industry.

S&P concludes that while initially insurers and reinsurers will find the introduction of IFRS to be traumatic, "ultimately, the capital markets, consumers, and the more sophisticated financial statement users will reward insurers for their improved transparency rather than penalizing them for volatility." Benefits of adopting ED 5 that were cited by S&P, in addition to enhanced consistency and transparency, include better understanding of the risks to which insurers are exposed, and their potential rewards; more informed company managements and boards; better alignment of product pricing and financial reporting; and regulatory benefits, possibly even reduced regulatory filings and requirements. We are grateful to Standard & Poor's for allowing us to make their report available on IASPlus. Click to download:

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