IFRS 17 Impact and OPAT Analysis

Overview of IFRS 9 and IFRS 17 Accounting Standards Invested Assets Assets Liabilities and Equity AIA IFRS 9 Financial Instruments ■ Measurement mostly at fair value Impairment model: Expected Credit Losses ■ Classification of assets into FVTPL, FVOCI and amortised cost Insurance Contract and Other Liabilities IFRS 17 Insurance Contracts (1) ■ Best Estimate Liabilities (BEL) ■ Risk Adjustment for non-financial risks (RA) ■ Contractual Service Margin (CSM) OCI OCI (2) Balances Deferred acquisition costs no longer exist Other Assets Total Equity ■ Mark-to-market on FVOCI fixed income assets Reinsurance included under IFRS 17 liabilities Allocated Equity ▪ Effect of changes in discount rates on insurance contract liabilities for non-par business (3) Notes: (1) IFRS 17 insurance contract liabilities are presented net of insurance contract assets and assets for insurance acquisition cash flows (2) OCI comprises fair value reserve and insurance finance reserve (3) Excluding unit-linked with significant protection 22 22

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