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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Zsofia Szikrane Lindner & Beatrix Denes & Gabriella Kosztik & Gabriella Meresz & Maria Somogyvari Sandorne, 2024. "Main Impacts of the Introduction of IFRS 17 on the Hungarian Insurance Sector," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 23(3), pages 71-98.
    • Handle: RePEc:mnb:finrev:v:23:y:2024:i:3:p:71-98
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    File URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-23-3-st3-szikrane-lindner-denes-kosztik-meresz-somogyvari.pdf
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    More about this item

    Keywords

    IFRS 17; accounting; insurance; capital position; supervision;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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