(paragraphs 97-116 of IFRS 17)

Reconciliation of components of the insurance contract liability (paragraphs 98-105 of IFRS 17)

BC350 IFRS 17 requires an entity to disaggregate the insurance contract liability into components as follows (see paragraph 40 of IFRS 17):

(a) the liability for remaining coverage, excluding the amounts in (b) below. For liabilities measured using the premium allocation approach, this is the unearned premium, less any unamortised insurance acquisition cash flows.

(b) the loss component of the liability for remaining coverage (see paragraph 49 of IFRS 17). For liabilities measured using the premium allocation approach, this is the additional liability for onerous contracts (see paragraph 58 of IFRS 17).

(c) the liability for incurred claims.

BC351 IFRS 17 requires entities to disclose a reconciliation from the opening to the closing balance separately for each of the components listed in paragraph BC350 and separately for insurance contracts issued and reinsurance contracts held, to explain how insurance revenue is determined, and to show how the amounts in the statements of financial position and financial performance are linked.