Building Block Approach

Premium allocation approach

Variable fee approach

The main difference between the general measurement model and the variable fee approach is the
unlocking of the CSM for interest rate changes. The service fee (the increase of the CSM every year) is
usually (for the GMM) calculated based on the interest rates at inception, but if an interest rate change
occurs and the entity has to apply the variable fee approach, the CSM is unlocked for changes. In this
case, the service fee is calculated using the current interest rates and no changes are recognized in P&L
or OCI.

BB Aproach

Cash Inflows – Premiums

Outflows – claims, Admin expenses

Discount Adjustments - +

Risk Adjustments - -

CSM – Contractual Service Margin – Ledger postings from csm

Liability will be created on Liabilities side in BS and when it is accrued in each period will be transferred
to P&L

When accrued over each period will be transferred to P&L as profit or loss

Fixed term

Whole life

Unit linked

Source data - > Result Data

Policy Data

Actuarial Cashflows

Payments Claims and other Data

Estimated Inflows and Outflows

Apply Discounting

Apply risk adjustments

CSM calculation

Onerous contract test

CSM – compliant sub-ledger postings with GL mapping

IFRS 17 establishes the principles for the recognition, measurement, presentation, and disclosure of
insurance contracts.

Insurance Analyzer

General Ledger Connector: Customizing & Other Topics

Interfacing Actuarial Engines

Usage General Derivations

Usage Analytical Attributes & Secondary Data Sources

Usage of Posting Rules

Usage of Calculation Methods

Usage of Financial Position Objects (FPO)

Customizing of Key Figure Valuation Rules

Scaling of Cash Flows