Navigating IFRS 17: Caribbean Insurers

IFRS 17 introduces a consistent, principle-based framework for insurance contract accounting, replacing the patchwork of practices under IFRS 4. While its benefits include enhanced transparency, comparability, and investor confidence, Caribbean insurers face unique implementation challenges due to market structure, data limitations, and regulatory diversity.

Key Caribbean-Specific Issues: 

• Limited Market Data & Illiquid Instruments   IFRS 17 relies on current, market-based inputs for discount rates and cash flow projections. Many Caribbean jurisdictions lack deep financial markets or long-duration government bonds, making it challenging to align liability durations and apply fair value principles.
• Sparse Mortality & Risk Data: Smaller populations and fragmented data sources lead to volatility in mortality assumptions. Some insurers use foreign mortality tables (e.g., Dutch tables in Aruba), but regional longevity trends are less homogeneous, complicating model calibration.
• Regulatory Ambiguity & Resource Constraints: Engagement from regional regulators varies. Some insurers await guidance or examples from larger markets before committing to full implementation. Non-public insurers may not be required to adopt IFRS 17, creating uneven adoption across the region.
• Principle-Based Flexibility   IFRS 17 allows for simplifications “without undue cost and effort.” Caribbean insurers can leverage this to reduce modelling complexity, use proxy data, and streamline disclosures — especially where complete stochastic modelling is impractical.
• Cross-Border Data Harmonization: Regional insurers operating across multiple jurisdictions must reconcile differing regulatory expectations, data availability, and actuarial practices — a challenge for consolidated reporting and group-level compliance.

Strategic Considerations

• Focus on materiality and proportionality when applying IFRS 17 principles.
• Engage early with regional regulators and actuarial associations to align expectations.
• Consider collaborative data pooling across markets to improve risk modelling.
• Use simplified approaches where justified, but document assumptions clearly for audit readiness.