CIA.IFRS17 Underlying Item

MickyBMickyB
in CIA.IFRS17

Hi,

I am not sure I fully understand the discounting section of this paper in terms of cash flows that very and don't very with the returns of the underlying item. Are there any concrete examples of this and an example of the underlying item?

Thanks

Comments

  • Staff-T1Staff-T1

    Cash flows that vary with the underlying item would be profit sharing provisions like contingent profit commissions where the underlying item would be the insurance contract itself. Cash flows that do not vary with the underlying are mostly stuff like fixed expenses (Office rent for example). I wouldn't worry too much about this - I do not think it is an important concept for the paper

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