Impact of IFRS 17 changes
3
Gains from profitable sales will be amortized over life of contracts;
onerous contracts will continue to be recognized as strain at issue
Impact of new business ¹ under IFRS 4 & IFRS 17
(Illustrative; not to scale)
2019
2020
2021
Pricing gain
Pricing strain
2022
IFRS 4
Net reported impact
I New
CSM
2022
IFRS 17
•
Under IFRS 4, we record the present value of future profits
above risk margins at origination of contract. Net reported
pricing gains are a combination of gains and losses at issue
o Gains originate mainly in developed markets, such as
Canada, while strain originates mainly in high-growth,
developing markets in Asia
Under IFRS 17, losses continue to be recognized at origination,
but gains are recognized in CSM and then amortized gradually
into income
Transition CSM amortization is not sufficient to immediately
replace the reduction in earnings, as both sales volumes and
margins are growing
•
Refer to Appendix for additional details on onerous contracts
SUN
LIFE
I FR S 1 7
•
MAY
1
2022 Represents a non-IFRS financial measure. Refer to "Non-IFRS financial measures" on slide 3 for more information
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