Risk Margin for Claims and Premium Liability in Accordance with IFRS 17

The Building Block Approach (BBA) is one of the liability measurement approaches proposed in the new insurance contract standards – International Financial Reporting Standards (IFRS) 17. Of the three components under BBA, determining the risk margin is the most essential. This project will develop a model that would determine the risk margins and claim provisions, compare the risk margins with those for unpaid claims under the Minimum Capital Test in the Office of the Superintendent of Financial Institutions (OSFI) Guidelines, test the sensitivity of the model, and construct a decision tree to determine if a contract is appropriate to be evaluated by BBA. From this project, the partner organization – Baron Insurance Services will get advanced knowledge on risk margin and claim provision modeling before the implementation of IFRS 17, which very few consulting and insurance companies is working on currently.

Faculty Supervisor:

Student:

Partner:

Addie Insurance Services Inc

Discipline:

Statistics / Actuarial sciences

Sector:

Finance, insurance and business

University:

University of Waterloo

Program:

Accelerate