Ensuring effective accounting rules
For many years, the International Accounting Standards Board (IASB) has been developing global accounting standards that aim to bring a greater degree of consistency and transparency to financial reporting. These are referred to as the International Financial Reporting Standards (IFRS).
While the European insurance industry supports the aims of IFRS, it is working hard to ensure that the standards work as intended. For example, the industry is concerned about the tendency to measure assets and liabilities seperately when, for insurers, the two are intrinsically linked, and how they interact is crucial for measuring both an insurer's balance sheet and its profitability. Another important challenge is how to ensure that the long-term nature of insurers' business is captured in annual reporting.