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Adoption of IFRS 17 | 12 Months Ended
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Dec. 31, 2023
Disclosure of Detailed Information About Adoption of IFRS 17 [Abstract] |
Adoption of IFRS 17 | Note 25 Adoption of IFRS 17 IFRS 17 Transition The Company is required to prepare an opening balance sheet as at January 1, 2022, the date of transition to IFRS 17, which forms the starting point for its financial reporting in accordance with IFRS 17. Any differences between the carrying value and the presentation of assets, liabilities and equity determined in accordance with CALM and IFRS 17, as at January 1, 2022, were recorded in opening retained earnings and accumulated other comprehensive income. On the transition date, January 1, 2022, the Company:
• |  | Identified, recognized, and measured each group of contracts as if IFRS 17 had always applied, unless it was impracticable (see Full Retrospective Approach and Fair Value Approach below);
• |  | Identified, recognized, and measured assets for insurance acquisition cash flows as if IFRS 17 had always applied, unless it was impracticable. However, no recoverability assessment was performed before the transition date;
• |  | Derecognized any balances that would not exist had IFRS 17 always applied;
• |  | Measured own use real estate properties that were underlying items of insurance contracts with direct participation features at fair value; and
• |  | Recognized any resulting net difference in equity.
Full Retrospective Approach The Company has adopted IFRS 17 retrospectively unless the full retrospective approach was deemed impracticable. The Company has applied the full retrospective approach to most contracts issued on or after January 1, 2021, except for participating insurance contracts and variable annuity contracts for which the fair value approach was used. Fair Value Approach The Company has applied the fair value approach to all insurance contracts issued prior to January 1, 2021, as obtaining reasonable and supportable information to apply the full retrospective approach was deemed impracticable. IFRS 17 allows the use of the fair value approach for groups of insurance contracts with direct participation features if the risk mitigation option is applied prospectively from the transition date and the Company used derivatives, reinsurance contracts held, or non-derivative financial instruments held at FVTPL to mitigate financial risk on these groups of contracts. With these conditions met, the Company has elected to apply the fair value approach to participating insurance contracts and variable annuity contracts issued on or after January 1, 2021. Under the fair value approach, the Company has determined the CSM of the GMM and VFA liabilities for remaining coverage at the transition date as the difference between the fair value of the groups of insurance contracts and the fulfilment cash flows measured at that date. In determining the fair value, the Company has applied the requirements of IFRS 13 “Fair Value Measurement”, except for the demand deposit floor requirement. The Company used the income approach to determine the fair value of the insurance contracts at the transition date, in which future cash flows are discounted to a single amount that reflects current market expectations about those future amounts. To determine groups of insurance contracts under the fair value approach the Company has aggregated contracts issued more than one year apart as it did not have reasonable and supportable information to divide groups into those including only contracts issued within one year or less. For the application of the fair value approach, the Company has used reasonable and supportable information available at the transition date in order to:
• |  | Identify groups of insurance contracts;
• |  | Determine whether an insurance contract meets the definition of an insurance contract with direct participation features;
• |  | Identify discretionary cash flows for insurance contracts without direct participation features; and
• |  | Determine whether an investment contract meets the definition of an investment contract with discretionary participation features.
For insurance contracts where the fair value approach was applied, the discount rate used to determine the fair value of the group of insurance contracts was determined at the transition date. For cash flows of insurance contracts that do not vary based on the returns on underlying items, the Company determines discount rates by adjusting a liquid risk-free yield curve to reflect the differences between the liquidity characteristics of the financial instruments that underlie the rates observed in the market and the liquidity characteristics of the insurance contracts (a bottom-up approach). Other Comprehensive Income at Transition Under IFRS 17 changes in the carrying amount of insurance contracts arising from the effect of and changes in the time value of money and in financial risk are presented as insurance finance income or expense (except for some changes for insurance contracts with direct participation features under certain circumstances). Under IFRS 17 the Company has the option to present all insurance finance income or expense in profit or loss or disaggregated between profit or loss and OCI (the “OCI option”). The Company has elected the OCI option and determined the cumulative OCI balance at transition as follows:
• |  | For some GMM and PAA groups of contracts where the fair value approach was applied, the cumulative OCI was set retrospectively only if reasonable and supportable information was available, otherwise it was set to zero at the transition date.
• |  | For GMM groups of contracts where the full retrospective approach was applied, the cumulative balance was calculated as if the Company had been applying the OCI option since inception of the contracts.
• |  | For VFA contracts, the cumulative OCI at transition was set equal to the difference between the market value and carrying value of the underlying items.
Reclassification of Financial Assets for the Comparative Period of IFRS 17 Adoption Under the amendments to IFRS 17 with regard to the “Initial Application of IFRS 17 and IFRS 9 – Comparative Information” (“IFRS 17 amendments”), the Company has elected the option to reclassify financial assets, including those held in respect of activities not connected to contracts within the scope of IFRS 17, on an instrument-by-instrument basis, for the comparative period in alignment with the expected classification on initial application of IFRS 9 as at January 1, 2023. These reclassification changes also led the Company to present certain investment results previously reported in net investment income or OCI under IAS 39, within OCI or net investment income in alignment with the expected classifications of IFRS 9, respectively.
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Table of Contents The following table presents invested assets by type and measurement category as at December 31, 2021, with transitional measurement differences and presentation differences and then invested assets by type and category as at January 1, 2022.
|  | December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  | Impact of IFRS 17 amendments |  |  |  |  |  |  |  |  | January 1, 2022 |  |  |  |
|  | IAS 39 Measurement category |  |  | Total carrying value |  |  |  |  |  |  |  |  | Measurement differences |  |  | Presentation differences |  |  |  |  |  |  |  |  | Total carrying value |  |  | Measurement category |
Cash and short-term securities |  |  | AFS |  |  | $ | 14,339 |  |  |  |  |  |  |  |  |  |  | $ | – |  |  | $ | 2,214 |  |  |  |  |  |  |  |  |  |  | $ | 16,553 |  |  |  | FVOCI (1) |
|  |  | FVTPL |  |  |  | 2,214 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (2,214 | ) |  |  |  |  |  |  |  |  |  |  | – |  |  |  | FVTPL (2) |
|  |  | Amortized cost |  |  |  | 6,041 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 6,041 |  |  |  | Amortized cost (3) |
|  |  |  |  |  |  | 22,594 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 22,594 |  |  |  |  |
Debt securities |  |  | AFS |  |  |  | 33,097 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | 184,365 |  |  |  |  |  |  |  |  |  |  |  | 217,462 |  |  |  | FVOCI (1) |
|  |  | FVTPL |  |  |  | 189,722 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (184,365 | ) |  |  |  |  |  |  |  |  |  |  | 5,357 |  |  |  | FVTPL (2) |
|  |  | Amortized cost |  |  |  | 1,320 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 1,320 |  |  |  | Amortized cost (3) |
|  |  |  |  |  |  | 224,139 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 224,139 |  |  |  |  |
Public equities |  |  | AFS |  |  |  | 2,351 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (2,351 | ) |  |  |  |  |  |  |  |  |  |  | – |  |  |  |  |
|  |  | FVTPL |  |  |  | 25,716 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | 2,351 |  |  |  |  |  |  |  |  |  |  |  | 28,067 |  |  |  | FVTPL (2) |
|  |  |  |  |  |  | 28,067 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 28,067 |  |  |  |  |
Mortgages |  |  | AFS |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 1,897 |  |  |  | 29,901 |  |  |  |  |  |  |  |  |  |  |  | 31,798 |  |  |  | FVOCI ( 1) |
|  |  | FVTPL |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 37 |  |  |  | 1,166 |  |  |  |  |  |  |  |  |  |  |  | 1,203 |  |  |  | FVTPL (2) |
|  |  | Amortized cost |  |  |  | 52,014 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (31,067 | ) |  |  |  |  |  |  |  |  |  |  | 20,947 |  |  |  | Amortized cost (3) |
|  |  |  |  |  |  | 52,014 |  |  |  |  |  |  |  |  |  |  |  | 1,934 |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 53,948 |  |  |  |  |
Private placements |  |  | AFS |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 4,407 |  |  |  | 42,175 |  |  |  |  |  |  |  |  |  |  |  | 46,582 |  |  |  | FVOCI ( 1) |
|  |  | FVTPL |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 40 |  |  |  | 667 |  |  |  |  |  |  |  |  |  |  |  | 707 |  |  |  | FVTPL (2) |
|  |  | Amortized cost |  |  |  | 42,842 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (42,842 | ) |  |  |  |  |  |  |  |  |  |  | – |  |  |  | Amortized cost (3) |
|  |  |  |  |  |  | 42,842 |  |  |  |  |  |  |  |  |  |  |  | 4,447 |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 47,289 |  |  |  |  |
Policy loans |  |  | Amortized cost |  |  |  | 6,397 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (6,397 | ) |  |  |  |  |  |  |  |  |  |  | – |  |  |  | N/A (4) |
Loans to Bank clients |  |  | Amortized cost |  |  |  | 2,506 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 2,506 |  |  |  | Amortized cost (3) |
Other invested assets |  |  | AFS |  |  |  | 89 |  |  |  |  |  |  |  |  |  |  |  | (4 | ) |  |  | 238 |  |  |  |  |  |  |  |  |  |  |  | 323 |  |  |  | FVOCI ( 1) |
|  |  | FVTPL |  |  |  | 21,157 |  |  |  |  |  |  |  |  |  |  |  | (10 | ) |  |  | 617 |  |  |  |  |  |  |  |  |  |  |  | 21,764 |  |  |  | FVTPL (2) |
|  |  | Amortized cost |  |  |  | 855 |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (855 | ) |  |  |  |  |  |  |  |  |  |  | – |  |  |  | Amortized cost (3) |
|  |  |  |  |  |  | 22,101 |  |  |  |  |  |  |  |  |  |  |  | (14 | ) |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 22,087 |  |  |  |  |
Total in-scope invested assets |  |  |  |  |  |  | 400,660 |  |  |  |  |  |  |  |  |  |  |  | 6,367 |  |  |  | (6,397 | ) |  |  |  |  |  |  |  |  |  |  | 400,630 |  |  |  |  |
Out-of-scope invested assets (5) |  |  | Other |  |  |  | 26,438 |  |  |  |  |  |  |  |  |  |  |  | 1,035 |  |  |  | – |  |  |  |  |  |  |  |  |  |  |  | 27,473 |  |  |  | Other (5) |
Total Invested Assets |  |  |  |  |  | $ | 427,098 |  |  |  |  |  |  |  |  |  |  | $ | 7,402 |  |  | $ | (6,397 | ) |  |  |  |  |  |  |  |  |  | $ | 428,103 |  |  |  |  |
(1) | The reclassification of unrealized gains (losses), net of tax, of $11,868 from retained earnings to accumulated other comprehensive income (AOCI) related to FVOCI classification of debt investments classified as FVTPL under IAS 39.
(2) | The reclassification of unrealized gains (losses), net of tax, of $268 from AOCI to retained earnings related to FVTPL classification of debt securities classified as FVOCI under IAS 39.
(3) | The re-measurement of debt securities from amortized cost to FVOCI or FVTPL resulted in an increase in carrying value of $6,367. The impact on AOCI and retained earnings, net of tax, was $5,041 and $952, respectively.
(4) | Policy loans were reclassified from invested assets to insurance contract liabilities under IFRS 17 with no re-measurement and no impact to equity.
(5) | Own use real estate properties which are underlying items for insurance contracts with direct participating features were remeasured to fair value as if they were investment properties, as permitted by IFRS 17. This re-measurement resulted in an increase of carrying value of $1,035. The impact to retained earnings, net of tax, was $915.
The Company has elected to apply the impairment requirements of IAS 39 (incurred losses) for the comparative period as provided for under IFRS 17. Accordingly, for assets that were classified as FVTPL under IAS 39, where no impairment was required, but were reclassified to FVOCI or amortized cost under IFRS 9 for the comparative period, the Company did not measure any impairment for the comparative period since IAS 39 impairment was not calculated. Opening balance sheet under IFRS 17 “Insurance Contracts” including classification and measurement changes of financial assets Effects from applying IFRS 17 resulted in a reduction of total equity of $ 11,997 , net of tax, as at January 1, 2022. The opening IFRS 17 balance sheet and related adjustments as at January 1, 2022 are presented below:
|  | IFRS 4 & IAS 39 December 31, 2021 |  |  | Opening IFRS balance sheet adjustments |  |  | IFRS 17 & IAS 39 January 1, 2022 |
|  | Measurement differences |  |  |  |
|  | Transition CSM |  |  | Contract measurement |  |  | Presentation differences |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total invested assets |  | $ | 427,098 |  |  | $ | – |  |  | $ | 7,402 |  |  | $ | (6,397 | ) |  | $ | 428,103 |
Total other assets |  |  | 90,757 |  |  |  | 2,877 |  |  |  | 5,617 |  |  |  | 1,078 |  |  |  | 100,329 |
Segregated funds net assets |  |  | 399,788 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 399,788 |
Total assets |  | $ | 917,643 |  |  | $ | 2,877 |  |  | $ | 13,019 |  |  | $ | (5,319 | ) |  | $ | 928,220 |
Liabilities and Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance contract liabilities, excluding those for account of segregated fund holders |  | $ | 392,275 |  |  | $ | 21,466 | (1) |  | $ | 10,014 |  |  | $ | (18,134 | ) |  | $ | 405,621 |
Investment contract liabilities |  |  | 3,116 |  |  |  | – |  |  |  | – |  |  |  | 6,948 |  |  |  | 10,064 |
Other liabilities |  |  | 63,595 |  |  |  | (2,823 | ) |  |  | (784 | ) |  |  | 5,867 |  |  |  | 65,855 |
Insurance contract liabilities for account of segregated fund holders |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 130,836 |  |  |  | 130,836 |
Investment contract liabilities for account of segregated fund holders |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 268,952 |  |  |  | 268,952 |
Segregated funds net liabilities |  |  | 399,788 |  |  |  | – |  |  |  | – |  |  |  | (399,788 | ) |  |  | – |
Total liabilities |  |  | 858,774 |  |  |  | 18,643 |  |  |  | 9,230 |  |  |  | (5,319 | ) |  |  | 881,328 |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders and other equity holders’ retained earnings |  |  | 23,492 |  |  |  | (13,607 | ) |  |  | (229 | ) |  |  | – |  |  |  | 9,656 |
Shareholders’ accumulated other comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance finance income (expenses) |  |  | – |  |  |  | – |  |  |  | (17,117 | ) |  |  | – |  |  |  | (17,117 | )
Reinsurance finance income (expenses) |  |  | – |  |  |  | – |  |  |  | 984 |  |  |  | – |  |  |  | 984 |
FVOCI investments |  |  | 848 |  |  |  | – |  |  |  | 16,916 |  |  |  | – |  |  |  | 17,764 |
Other equity items |  |  | 34,068 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 34,068 |
Total shareholders’ equity |  |  | 58,408 |  |  |  | (13,607 | ) |  |  | 554 |  |  |  | – |  |  |  | 45,355 |
Participating policyholders’ equity |  |  | (1,233 | ) |  |  | (1,440 | ) (1) |  |  | 2,774 |  |  |  | – |  |  |  | 101 |
Non-controlling interests |  |  | 1,694 |  |  |  | (719 | ) (1) |  |  | 461 |  |  |  | – |  |  |  | 1,436 |
Total equity |  |  | 58,869 |  |  |  | (15,766 | ) |  |  | 3,789 |  |  |  | – |  |  |  | 46,892 |
Total liabilities and equity |  | $ | 917,643 |  |  | $ | 2,877 |  |  | $ | 13,019 |  |  | $ | (5,319 | ) |  | $ | 928,220 |
(1) | The post-tax CSM in the participating policyholders’ fund of $1.4 billion is expected to be recognized in shareholder net income over time. In addition, $0.7 billion of post-tax CSM is attributable to non-controlling interests.
The following table shows the nature and amount of the measurement adjustments made to the opening balance sheet:
Measurement Differences |  | Description
Transition CSM |  | Contractual Service Margin (CSM) is a new liability that represents future unearned profits on insurance contracts written. For this measurement step, the amount recognized as at the transition date, January 1, 2022, was $21,466. The impact on equity was $15,766, net of tax.
Contract Measurement |  | Under IFRS 17 other components of insurance contracts, aside from the CSM, are also remeasured. This measurement step includes the following changes: Risk Adjustment (+2.1 billion to equity) (1) : Changes to the provisions held within the Company’s insurance liabilities for non-economic risk on application of the IFRS 17 standard; Discount Rates (-1.5 billion to equity) (1) : Changes in the economic assumptions used in the determination of the Company’s insurance liabilities from the IFRS 4 CALM framework to IFRS 17, and changes in the carrying value of the Company’s assets backing insurance liabilities under IFRS 9; Other Revaluation Changes (+3.1 billion to equity): Includes other changes in equity created by the application of IFRS 17. This includes changes to accounting for contract classifications, variable annuity guarantee contracts, and contract boundaries which increases the capitalization of future profits into the CSM, changes to the provisions for future taxes, and other changes related to the application of IFRS 17.
Participating and Non-Controlling Interest Equity |  | In previous steps all impacts to equity were shown in shareholders’ equity. This step shows the geography of the impacts between shareholders’ equity, participating policyholders’ equity and non-controlling interests.
(1) | Excluding impacts on variable annuity guarantee contracts.
The presentation differences are mainly comprised of the following:
• |  | Policy loans invested assets – Reclassified to insurance contract liabilities as they are insurance contract related.
• |  | Contract classification – Some contracts were reclassified from insurance contracts to investment contracts or service contracts, with some contracts reclassified from investment contracts to insurance contracts. The amount shown in presentation differences in the table above relates to where they appear in the opening balance sheet. Any changes to these contracts’ measurement value are shown in the contract measurement step.
• |  | Insurance receivables & payables – These amounts were previously reported either as separate line items in the financial statements or recorded in miscellaneous assets and liabilities. These amounts have been reclassified to insurance contract liabilities as they are insurance contract related.
• |  | Embedded derivatives – These amounts were previously reported in miscellaneous assets and have been reclassified to insurance contract liabilities as they are insurance contract related.
• |  | Reinsurance funds withheld – These amounts were previously reported in other liabilities and have been reclassified to reinsurance contract assets as they are reinsurance contract related.
• |  | Deferred acquisition cost – These were previously reported in miscellaneous assets and have been reclassified to insurance contract liabilities as they are insurance contract related.
• |  | Insurance and investment contract liabilities for account of segregated fund holders – Segregated fund net liabilities were previously reported together, and have been separated into insurance contract liabilities for account of segregated fund holders (those associated with insurance contracts) and investment contract liabilities for account of segregated fund holders (those associated with investment contracts).

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