Even though IFRS 4 is an accounting standard, its ambition is to have a serious impact on the insurance business and management of insurance companies that are reporting in accordance with IFRS. It’s not only about a different form of presenting specific transactions, but it brings a completely new perspective on insurance services and it shows in detail the profitability of the insurance business.
An entirely new form of financial statement presentation related to a new insurance policy valuation model and related assets and liabilities will lead not only to change in incentive schemes for insurance companies management, but it will probably influence the development of new products, structure of distribution networks or IT environment in insurance companies. IFRS 4 implementation will require vast investments into infrastructure by most insurance companies.
New form of presenting financial statements will have to be interpreted by external subjects and insurance companies will find new competitors on financial market.
It is expect that a revised draft of IFRS 4 will be issued during the second quarter of 2013.