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Home IFRS Masterclass IFRS 17 IFRS 17: What is a simple example of a non-insurance component?

IFRS 17: What is a simple example of a non-insurance component?

Let’s say your car insurance company provides a free oil change during the year. The annual insurance premium is $100.

Essentially there are two components built into this contract:
1-Insurance Component: The coverage that the insurer will provide in case of damage etc.
2- Goods or services, the oil change service that will be provided once a year.

In practice, insurance contracts can be complex with investments components or embedded derivatives built into them.