This white paper contains a comparative analysis of the 2025 International Financial Reporting Standards (IFRS) annual reports of four non-life insurance companies: Achmea, ASR, Atradius, and NN. With 2025 marking the third year of reporting under IFRS 9 and IFRS 17, we observe the development of the company financial statements and key performance metrics. The analysis examines balance sheet components, performance indicators, and value metrics to illuminate the evolving dynamics of the non-life insurance sector.
A defining characteristic of non-life insurers is their extensive use of the premium allocation approach (PAA), where the contractual service margin (CSM) remains implicit rather than explicitly reported. Milliman has created an internal database containing the financial results of more than 100 international financial institutions, concentrating on insurance activities and the valuation of (re)insurance contracts under IFRS 17. We drew on this database to perform the analysis in this paper, which delves into balance sheet components of shareholder equity, revaluations, CSM, and risk adjustment (RA), which collectively shape the perceived value of these companies. The paper also explores the dynamics of these components and their implications for future financial performance, highlighting the changes in 2025.
Key discussion points include the following.
- Balance sheet information: insight into a company's value, encompassing shareholder equity, revaluations, CSM, and RA.
- Comparison of IFRS 17 and Solvency II: differences between the values of the insurance liabilities on the two versions of balance sheets.
- Key performance indicators: combined ratio, gross and net insurance service ratio, CSM growth, and new business CSM.
- Components of the income statement: insurance service results, non-attributable expense, investment results, and net results.
- Loss component: loss component beginning of period, new business, reversal of onerous contracts, and other metrics.
- Reinsurance: net results, CSM end-of-period, RA end-of-period, and other measures.
- Value perspective: Stock of future profits, comprehensive equity, and Solvency II own funds and solvency ratio.