6 UKEB Post-implementation Review of IFRS 17 Insurance Contracts

29 January 2026 Agenda Paper 6

Executive Summary

Project Type

UKEB Post-implementation Review

Project Scope

Significant

Purpose of the paper

The purpose of this paper is to set out the plan for the UKEB Post-implementation Review of IFRS 17 Insurance Contracts (UKEB PIR of IFRS 17).

Summary of the Issue

The UKEB adopted IFRS 17 Insurance Contracts in May 2022. The Board assessed that the standard led to a significant change in accounting practice. As a result, the UKEB is required, under the legislation, to conduct a post-implementation review and publish a report of the results no later than 1 January 2028.

This is the first post-implementation review for a standard adopted by the UKEB. The Secretariat considers that initiating the project at this time will help raise awareness amongst stakeholders, accommodate the lead time necessary to commission an external report and allow for contingency within the timeline.

Decisions for the Board

1. Subject to addressing any comments raised at this meeting, does the Board approve the PIP for publication?

Recommendation

The Secretariat recommends that the Board approves the PIP for publication.

Appendices

Appendix A [Draft] Project Initiation Plan: UKEB Post-implementation Review of IFRS 17 Insurance Contracts

Appendix A: [Draft] Project Initiation Plan: UKEB Post-implementation Review of IFRS 17 Insurance Contracts

Purpose

A1This paper sets out the plan to conduct a UKEB Post-implementation Review of IFRS 17 Insurance Contracts (UKEB PIR of IFRS 17).

A2At the time of writing this paper, the IASB has not indicated when it expects to conduct its post-implementation review (PIR) of IFRS 17 Insurance Contracts.

Background

IFRS 17

A3The primary objectives of the IASB's project to develop IFRS 17 were to make:

1. insurance companies' financial statements more useful to investors and other users of financial statements; and
2. insurance accounting more consistent across jurisdictions and products.

A4IFRS 17 replaced IFRS 4 Insurance Contracts. It established principles for the recognition, measurement, presentation and disclosure of insurance contracts (which IFRS 4 did not prescribe). IFRS 4 permitted entities to use a wide variety of national accounting practices, which were not necessarily comparable with each other. Amongst other things, this meant that, for groups with international subsidiaries, the financial position and performance of subsidiaries would not necessarily be reflected in the group accounts on a consistent basis.

A5IFRS 17 was issued by the International Accounting Standards Board (IASB) in May 2017. It was subsequently amended in June 2020 and in December 2021. Its effective date was 1 January 2023.

Endorsement and adoption of IFRS 17 for use in the UK

A6The UKEB considered the amended version of IFRS 17 for adoption during 2021 and 2022. The UKEB decided to adopt IFRS 17 for use in the UK on 16 May 2022.

UKEB PIR

PIR of IFRS 17

A7When adopting a standard for use in the UK, the UKEB needs to assess whether it is likely to lead to a 'significant change in accounting practice'. When the UKEB concludes so, it is subject to the requirements in paragraph 3 of Regulation 11 of SI2019/685 which requires the UKEB to:

1. carry out a review of the impact of the adoption of the standard; and
2. publish a report setting out the conclusions of the review no later than 5 years after the date on which the standard takes effect (being the first day of the first financial year in respect of which it must be used)'.

Significant Change in Accounting Practice

A8At the time of adopting IFRS 17 (in May 2022), the Endorsement Criteria Assessment (ECA) did not include the UKEB's preliminary view as to whether the implementation of IFRS 17 would lead to a 'significant change in accounting practice'. This is because the UKEB's Due Process Handbook¹, which sets out the need to incorporate this information in the ECA, was not in place at the time of the Board's decision to adopt IFRS 17.

A9The finalised UKEB DPH, published on 8 December 2022, included a requirement that future DECAs and ECAs include the Board's preliminary view on this criterion.

A10During the development of the ECA, the Board considered that a number of different aspects of IFRS 17 were likely to lead to a significant change in accounting practice. After the adoption of IFRS 17, the Board provided a clarification of its view that IFRS 17 meets this criterion by making a statement on the UKEB website that specified the UKEB “will carry out a review of the impact of the adoption of the standard and a report setting out the conclusions of this review will be published by the UKEB by 1 January 2028”.

A11We consider that this decision still holds and that no matters have arisen to contradict it.

Guidance

Government

A12The objective of a UKEB PIR is to assess the impact of the adoption of an international accounting standard. The UKEB currently is not required to apply the UK Government's guidance on PIRs. However, as conducting PIRs is part of the UKEB statutory requirements, considering the Government guidance in this area ensures that the UKEB adheres to best practice in the UK public sector.

A13The Government's Better Regulation Framework (BRF)² provides guidance on how to conduct impact assessments and PIRs³. Accordingly, the UKEB PIR of IFRS 17 will be developed to be broadly in line with the guidance for PIRs set by the BRF as well as the principles of best practice of the Department of Business and Trade (DBT)⁴.

IASB

A14At the time of writing this paper, the IASB has not indicated when it expects to conduct its PIR of IFRS 17. The IASB is required to conduct a PIR of each new accounting standard under its Due Process Handbook⁵. The timing of the PIR is usually after the new requirements have been applied internationally for two years, generally 30–36 months after the effective date.

A15The objective of an IASB PIR is to assess whether the effects of applying the new requirements on users of financial statements, preparers, auditors and regulators are as intended when the IASB developed those new requirements. The IASB will usually publish a request for information to obtain stakeholder feedback. When the IASB has finished its deliberations it publishes a report of its findings.

Purpose of UKEB PIR of IFRS 17

A16The UKEB PIR of IFRS 17 aims to carry out a review of the impact of the adoption of the standard.

A17The objective of IFRS 17, which is set out in paragraph 1 of the Standard, is:

“IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the Standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity's financial position, financial performance and cash flows.” [IFRS 17: 1]

A18In carrying out the UKEB PIR of IFRS 17, and in line with Government guidance⁶, the UKEB plans to:

1. Consider whether the objective of the Standard has been met.
2. Assess the extent to which the objective has been met.
3. Assess whether there are issues that could be addressed through the IASB's PIR of IFRS 17.

A19The UKEB PIR of IFRS 17 is expected to commence ahead of the IASB's PIR. The output of the UKEB PIR will be used to influence the IASB's PIR.

Due process for PIR

A20Section 8 of the UKEB Due Process Handbook (DPH) sets out the requirements for a UKEB PIR. The process is split in two phases. In summary:

1. Phase one: the UKEB sets out the scope of the PIR, undertaking the following steps:
   1. Project initiation plan (PIP) (mandatory).
   2. Desk-based research.
   3. Initial consultation (mandatory).
   4. Publication of a request for information (mandatory) with a 90-day consultation period.
2. Phase two:
   1. Outreach activities (mandatory).
   2. Publication of final report (mandatory) and a due process compliance statement (mandatory).

A21The content of the report includes:

1. an overview of the UKEB PIR process and its timeline;
2. background information to the international accounting standard under review;
3. a summary of the evidence gathered and findings;
4. a summary of the outreach activities and sources of stakeholder comments (after publication of the request for information); and
5. the UKEB's conclusions from the review.

Project Plan

Proportionality Assessment

A22This is the UKEB's first PIR for a standard that it has adopted for use in the UK. Previous UKEB PIR projects focused on influencing the IASB's PIRs.

A23This consideration will affect the proportionality assessment, as noted in the paragraphs that follow.

Significance and Size

Entities Affected by the Proposals

A24IFRS 17 affects entities that issue insurance contracts, most typically insurance undertakings.

A25The insurance industry is strategically important to the UK economy, for example:

1. The UK insurance industry is the largest in Europe and the third largest in the world⁷. Data from the Bank of England indicates that the total value of Gross Written Premiums (GWP)⁸ of UK insurance companies was approximately £350 billion, as of 2024⁹.
2. UK insurance undertakings manage a significant amount of assets. The Association of British Insurers reports that the UK insurance sector manages investment of over £1.8 trillion¹⁰, nearly 20% of UK households net assets ¹¹.

A26IFRS reporters are an important share of the industry.

1. A total of 17 insurance entities were listed on the London Stock Exchange as of December 2025¹². These entities are required to produce consolidated accounts using IFRS. The total market capitalisation of these listed insurers was approximately £105 billion as of December 2025¹³.
2. An additional 28 unlisted entities voluntarily apply IFRS. These entities were identified as part of the Endorsement Criteria Assessment of IFRS 17, which was published in May 2022.
3. The total insurance revenue of entities applying IFRS was just short of £100 billion of as of 2024 year-end.

A27Table 1 below provides a further breakdown of insurance revenues by size and listing status.

Table 1: Revenue of insurers that apply IFRS in the UK

Note: * This analysis is based on the population of unlisted entities that was identified as part of the ECA of IFRS 17, which was published in 2022.

Complexity

A28IFRS 17 introduced complex requirements for entities reporting insurance contracts.

A29As noted in the Endorsement Criteria Assessment (ECA) of IFRS 17, this is because the underlying economics of these transactions is complex. Insurance contracts create a variety of complex bundles of rights and obligations for the issuers. Insurance entities also typically use complex actuarial methodologies and assumptions to price insurance policies and estimate the cost of claims.

A30To account for such contracts, IFRS 17 introduced three measurement models, as well as a number of accounting policy choices and transition approaches to reflect the diverse and complex business of insurance entities.

Expected Timeline

A31As set out above, the UKEB is required to undertake the PIR and publish a report setting out the conclusions of the review no later than 5 years after the date on which the standard takes effect (being the first day of the first financial year in respect of which it must be used) i.e. by 1 January 2028 for IFRS 17.

A32The Secretariat considers that initiating the project at this time will help raise awareness amongst stakeholders, accommodate the lead time necessary to commission an external report and allow for contingency within the timeline.

A33The planned project timeline is reported (see paragraphs A44–A45).

Expected Interest

A34The Secretariat anticipates interest in this project mainly from insurance entities, their shareholders/investors as well as accounting firms and institutes.

A35Another element which may provoke interest among our stakeholders is that this is the UKEB's first PIR.

Connectivity

A36As part of the development of the PIP, the UKEB has considered potential overlaps between IASB Accounting Standards and ISSB Sustainability Disclosure Standards.

A37The UKEB has not identified any significant connectivity implications for the project.

UKEB Project Scope

A38Based on the proportionality assessment above, the Secretariat recommends a 'Significant' scope for this project. The approach described in this document is based on this preliminary assessment.

A39The scope of the project may be reassessed at a future date based on desk-based research and stakeholder engagement.

Project plan

A40The UKEB proposes conducting the following research and stakeholder engagement activities:

Table 2: Key activities

| Optional | | Initial consultation: For example, consulting the UKEB's advisory and working groups to gather their input, views, opinions or feedback on technical matters. | 8.26–8.28 | | | Mandatory | | External report: The Secretariat proposes that the Board obtain a preliminary independent assessment of accounting and economic effects associated with IFRS 17. The report would assess: | A4(g) | |

| Optional | | This can be outsourced to external consultants. | | | Request for Information: The UKEB DPH requires the UKEB to publish a Request for Information (RFI) with a 90-day comment period. | 8.29–8.33 | | | Mandatory | | Outreach activities: The UKEB will engage with stakeholders to gather input. Engagement might include: | 8.37–8.38 | | | Mandatory | | UKEB PIR Report | 8.39–8.40 | | The UKEB will publish a report based on the findings of the external report, the RFI consultation, and the outreach activities. | Mandatory |

Resources Allocated

A41To undertake the activities described in this project plan, a project team has been assigned consisting of a Project Director with oversight of Senior Project Director.

A42The economics team will actively contribute to the project, considering that the PIR will focus on both accounting and economic impacts.

A43It is expected that the Project Director and the Economics Team Leader will jointly:

1. Supervise the drafting of the external report.
2. Conduct stakeholder engagement.
3. Draft the final PIR report.

Setting up an ad-hoc advisory group

A44The endorsement and adoption project for IFRS 17 was supported by an ad-hoc advisory group as, at that stage, the UKEB had not set-up its Advisory and Working Groups. For this project, we do not propose setting up another group. Instead, the UKEB can use:

1. Input from existing Advisory and Working Groups.
2. Stakeholder feedback from outreach activities.
3. Leverage the stakeholder network built from the endorsement and adoption activities for IFRS 17.

A45Moreover, there is a better understanding of the technical matters arising out of IFRS 17 now, given that three full years of implementation have passed and a number of reviews have been conducted by regulators, accounting firms and accounting institutes, etc.

Project Timeline

A46The proposed high-level project timeline is shown below. This provides a best estimate based on information known at this time. If necessary, a revised PIP will be presented to the Board, to reflect any major changes, as the project progresses.

A47Future dates are based on current expectations and may therefore be subject to modification. The Secretariat will bring a revised PIP to the Board if there are any significant changes to the project plan.

Table 3: Project timeline¹⁴

Question for the Board

1. Subject to addressing any comments raised at this meeting, does the Board approve the PIP for publication?

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