IFRS 17(보험계약) 시행과 보험사 재무적 변화

This study aims at providing systematic explanation on the IFRS 17-driven financial changes of Korean insurers and the behind rationale of those changes. First, the improvement of Korean insurers’ financial performance under IFRS 17 is primarily attributable to two factors; i) better revenue-expense matching due to the elimination of an accelerated amortization practice for new contract acquisition costs and ii) more stable profit pattern of the new revenue recognition system by which profits are recognized in proportion to the insurance services provided. Thus, Korean insurers’ enhanced financial performance could be taken as a positive change resulted from the correction of the inappropriate practices under the old accounting system. Second, Korean insurers’ improved financial health is mainly driven by decrease in insurance liabilities surrounding contractual service margin, a result of applying the Fair Value Method to existing contracts. In that sense, Korean insurers’ increased equity suggests decrease in future profitability and higher probability of onerous contracts, necessitating information user’ caution in interpreting such a seemingly positive signal. On the other hand, once financial performance and health have improved in the early stage of IFRS 17, managers are likely motivated to meet or beat the heightened financial benchmarks, possibly leading to more fierce sales competition. Managers, therefore, should be cautious that excessive sales competition may not undermine their profitability. This study is expected to be useful for a variety of purposes such as learning, investment, management, accounting policy, and research in terms of Korean insurers’ financial changes with the implementation of IFRS 17.