Still waiting for the libraries of your actuarial software to be updated for IFRS17? Worried that those libraries will not be sufficiently flexible to cater for the nuances and allowable differences in approach under IFRS17, especially as these differences can have a huge effect on your financial position? Need an independent system to ensure whatever output that comes from your actuarial department is accurate before using the figures in your accounts? Need a simple to use software which would allow you to understand and test the risks associated with IFRS17 implementation for your risk management department? Need to price your products under IFRS17 NOW to minimize adverse effects in 2021? A round of applause then for the A-PLOS actuarial software! Powerful enough for actuaries, simple enough for everyone to use.

Since 2011, Actuarial Partners has been actively developing and using models in the award winning platform to perform a variety of actuarial work including valuation and pricing exercises. In 2018, we have taken a step further by enhancing our models to be able to perform IFRS 17 calculations. A-PLOS is designed for both conventional insurance and takaful businesses. More than just theory, A-PLOS is currently being used in our IFRS17 work.

Apart from performing the liabilities calculations under RBC basis, the life office model now allows users to calculate IFRS 17 liabilities i.e. the Best Estimate Liabilities (BEL), Risk Adjustment (RA) and Contractual Service Margin (CSM) and also to perform quantitative impact study during the transition period.

The model projects the P&L and balance sheet to allow users to better understand the profit signature under IFRS 17 environment. In addition, the model also projects the movement of CSM allowing for the interest accretion, variation in experience, and changes in assumptions based on the selected profit carrier.

Insurance Contract Liabilities Time 0 1 2 3
Year 2015 2015 2015 2015
CMS and Loss Component
CSMStart CSM in force at last valuation 310000 604405 603070 601802
CSMIntAccretionIF Interest Accretion to the CSM 1162 766 761 756
CSMNewBusiness CSM increase due to New Business 0 0 0 0
CSMReleaseAmort CSM release due to amortization -5033 -2101 -2029 -1959
CMSExperinceVar CSM release due to experince variance 200000 0 0 0
CSMReleaseBasisChg CSM release due to change in assumptions 98276 - - -
CSM in Force 604405 603070 601802 600600



For development of new products or repricing of existing products, we have developed an Excel based pricing tool with as the backbone of the tool. This essentially means that users would only need to install a runtime version of, at a significant discount compared to the full development version.

The pricing model is able to cater product development and pricing for a variety of products including non-participating e.g. term, endowment, annuity, mortgage reducing term and investment linked policies as well as variation in Takaful operating models (e.g. Wakalah or Mudharabah) for the Takaful business. Outputs include:

  • key profit metrics such as profit margin, cost of capital, new business strain, payback period.
  • sensitivity of profits to key assumptions
  • new business financial projections
  • documentation as per BNM submission requirements in their guideline “Introduction of New Insurance Products” including profit tests output on key ages and financial impact studies

Furthermore say goodbye to using modal points for pricing, A-Plos is able to utiize the “go-seek” function to ensure that the same profit margin is embedded for each age and duration.

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Profitability Metrics

Profitability Metrics Pre-Capital Charges Post-Capital Charges Impact of Capital Charges
NBM (% APE) 166.82% 143.97% -22.85%
NBM (% PV Reserve) 71.36% 61.58% -9.77%
NBM (% PV Premium) 23.16% 19.99% -3.17%
NBS (% PV NBP) -28.97% -35.39% -6.42%
Payback Period (Year) 6 13 7
IRR 16.66% 0.00% -16.66%


Sensitivity Analysis

Scenario Description Profit Margin Impact on PM
1 Baseline 53%
2 Mortality + 20% 52% 0%
3 Mortality - 20% 53% 0%
4 Lapse + 20% 33% -20%
5 Lapse - 20% 82% 29%
6 Maintenance Expense + 20% 48% -5%
7 Initial Expense + 20% 51% -2%
8 Risk Free Rates + 2% 49% -4%
9 Risk Free Rates - 2% 58% 6%


The pricing tool has built in functions to show the above analysis under IFRS17. With this tool, insurers can start to reexamine their product line, or to develop new products that are more IFRS17 friendly (in terms of profit emergence).

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Profitability Metrics

Profitablity Metrics Pre-IFRS17 Post-IFRS17 Impactg of IFRS17
New Business Margin (% APE) 3% 2% -0.86%
New Business Margin (% PV Premium) 3% 2% -0.86%
New Business Strain (% PV NBP) 2% 0% -2.39%

Impact on Capital Position


Year Product Level Company Level
Profit After Reserve & Transfer Increase in Capital Required Total Capital Available (TCA) Total Capital Required (TCR) Capital Adequacy Ration (CAR)
0 60,000,000 30,000,000 200%
1 834 135 60,000,834 30,000,135 200%
2 5 -17 60,000,839 30,000,118 200%
3 5 125 60,000,844 30,000,243 200%
4 5 -59 60,000,849 30,000,184 200%


Year Product Level Company Level
Profit After Reserve & Transfer Increase in Capital Required Total Capital Available (TCA) Total Capital Required (TCR) Capital Adequacy Ration (CAR)
0 60,000,000 30,000,000 200%
1 177 135 60,000,177 30,000,135 200%
2 159 -17 60,000,335 30,000,188 200%
3 141 125 60,000,476 30,000,243 200%
4 123 -59 60,000,599 30,000,184 200%

An additional consideration for the Takaful business has been given when setting up the IFRS calculations since the mortality risk is contained in the Risk Fund while the Operator Fund bears the expense risk. Both of these funds generate profits and since profits need to be systematically recognized over the duration of the contract under IFRS 17, A-PLOS has been designed to produce necessary calculations for IFRS 17 under 2 different scenarios i.e. one where there could be one CSM (similar to the treatment for conventional insurance) or another scenario where there are 2 CSMs calculated assuming the risk fund and operator funds are two separate accounts. Under the two CSMs approach, the model allows users to understand the drivers that significantly affect the movement of the CSM in both accounts (Risk Fund and Operator’s Account).
To know more about our service offerings and how we can help you with A-PLOS or IFRS17, kindly contact