Main Impacts of the Introduction of IFRS 17 on the Hungarian Insurance Sector

Zsofia Szikrane Lindner (), Beatrix Denes (), Gabriella Kosztik (), Gabriella Meresz () and Maria Somogyvari Sandorne ()
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Zsofia Szikrane Lindner: Magyar Nemzeti Bank
Beatrix Denes: Magyar Nemzeti Bank
Gabriella Kosztik: Magyar Nemzeti Bank
Gabriella Meresz: Magyar Nemzeti Bank
Maria Somogyvari Sandorne: Magyar Nemzeti Bank

Financial and Economic Review, 2024, vol. 23, issue 3, 71-98

Abstract: The analysis presents the effects and supervisory experience of the transition to IFRS 17 applicable to the insurance sector from 1 January 2023. The new standard is significant as it sets out a harmonised methodology for insurance contracts based on fair value, which is also the greatest challenge. It is estimated that the sector spent HUF 13.5 billion between 2018 and 2023 to prepare for IFRS 17. Three insurers report under IFRS: the accounting policies of these companies have changed significantly, and the transition has resulted in an overall increase in their equity. Twelve other insurers belonging to international groups prepare IFRS calculations for the group accounts. The application of IFRS 17 mainly affects these entities in terms of business plans and performance measurement. For these institutions, the analysis of IFRS calculations showed that the impact on equity varies in direction and magnitude, but that overall the application of IFRS would result in an increase in equity.

Keywords: IFRS 17; accounting; insurance; capital position; supervision (search for similar items in EconPapers)
JEL-codes: G22 M41 M48 (search for similar items in EconPapers)
Date: 2024
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