PwC has completed a review of Aon’s PathWise platform for (re)insurers’ International Financial Reporting Standard (IFRS) 17 reporting.
Aon stated that it engaged PwC to assess PathWise’s IFRS 17 results in order to comply with the global IFRS 17 standard.
PwC Actuarial Services compared the results generated by PathWise with the results of PwC’s IFRS 17 calculation tool, and benchmarked PathWise using sample data sets.
Aon and PwC Actuarial Services developed the data sets, test plan and test cases used in the review, intending to test the various elements that were in-scope under a variety of possible situations, including the various IFRS 17 accounting options.
Aon outlined that this review did not reveal any material deviations (above one percent) between PwC Actuarial Services' IFRS 17 calculation tool (version 0.8.1254.1442) and PathWise’s IFRS 17 results (v2.24).
PwC’s calculation tool is aligned to the latest IFRS 17 insights, including the International Accounting Standards Board’s (IASB) Amendments to IFRS 17 published in June 2020.
As part of the review, in-scope model outputs included the general and simplified models and variable fee approach for initial and subsequent measurement, as well as contractual service margin calculations, accounting treatment of risk adjustment, reinsurance assets and the associated disclosures representing the results.
Calculations were compared on the cohort level (unit of account), and in-scope disclosures included the IFRS 17 balance sheet line items and the profit and loss line items with other comprehensive Income.
Out of scope for the project were the actual model logic implemented in PathWise, sub-ledger functionality, holding level reconciliation and any other non-IFRS 17 standards.
Koen Engels, PathWise solutions group account director at Aon, said: “Aon’s goal was to ensure that our interpretation and implementation of IFRS 17 in PathWise had a rigorous external review from a leading professional services company. PwC’s feedback allowed us to make adjustments to some corner cases, and we are pleased to have engaged in this important project to ensure our IFRS 17 engine is fit for purpose.”
Robin Zeeman, senior manager at PwC, added: “We are proud to have worked with Aon’s PathWise team on this IFRS 17 review. Despite the COVID-19 pandemic during 2020, we completed this project on the basis of the latest IASB IFRS 17 standard and are pleased to release this review conclusion.”
