🇬🇭 PAA-Optimized IFRS 17 Templates

Simplified Compliance for Ghana's Non-Life Insurance Industry

✅ 95% of Ghana Non-Life Products Qualify for PAA

Motor, Fire, Marine, and General Accident policies with ≤12 month coverage automatically qualify for simplified PAA treatment

This means: No CSM tracking, No complex calculations, Faster compliance!

Template 1: PAA Eligibility Tester

Confirm which products qualify for simplified PAA treatment

Quick Eligibility Check for Your Products:

Product Line Coverage Period Variability Test PAA Eligibility NIC Approval
Motor Comprehensive 12 months ✅ Low variability PAA ELIGIBLE ✅ Approved
Motor Third Party 12 months ✅ Low variability PAA ELIGIBLE ✅ Approved
Fire & Burglary 12 months ✅ Low variability PAA ELIGIBLE ✅ Approved
Marine Cargo < 12 months ✅ Low variability PAA ELIGIBLE ✅ Approved
Goods in Transit 12 months ✅ Low variability PAA ELIGIBLE ✅ Approved
Engineering (CAR/EAR) 24 months ⚠️ Check required BBA REQUIRED ⚠️ Review

💡 Good News for Ghana Insurers:

Since 95% of your products qualify for PAA, you can use simplified templates for almost everything. Only long-term engineering contracts need complex BBA treatment.

Template 2: PAA Liability Measurement (Simplified)

Core template for PAA-eligible products (Motor, Fire, Marine, etc.)

Component Motor (GHS '000) Fire (GHS '000) Marine (GHS '000) General Accident (GHS '000) Total (GHS '000)
Liability for Remaining Coverage (LRC) Premium Allocation Approach
Unearned Premium Reserve 15,450 8,200 3,450 4,200 31,300
Less: Deferred Acquisition Costs -2,318 -1,230 -518 -630 -4,696
Onerous Contract Provision 450 0 0 120 570
Total LRC 13,582 6,970 2,932 3,690 27,174
Liability for Incurred Claims (LIC) Undiscounted Basis (Short-term)
Outstanding Claims 12,300 5,450 2,100 3,890 23,740
IBNR Reserve 3,690 1,090 420 780 5,980
Risk Adjustment (Simplified) 1,599 654 252 467 2,972
Total LIC 17,589 7,194 2,772 5,137 32,692
TOTAL INSURANCE LIABILITY 31,171 14,164 5,704 8,827 59,866

Template 3: PAA Insurance Revenue Recognition

Simplified revenue recognition under PAA

Revenue Component Q1 2024 Q2 2024 Q3 2024 Q4 2024 YTD Total
Expected Premium Receipts 28,500 31,200 29,800 32,400 121,900
Less: Investment Component - - - - -
Premium Allocation (Time Basis) 27,850 30,450 29,100 31,650 119,050
Amortization of Acquisition Costs 4,178 4,568 4,365 4,748 17,859
Insurance Revenue (PAA) 32,028 35,018 33,465 36,398 136,909

✅ PAA Advantage:

No need to track CSM! Revenue recognition is simply the passage of time (straight-line) or based on expected pattern of insurance service if significantly different.

Template 4: Onerous Contract Test for PAA

Required quarterly test for PAA products

Product Group Expected Premiums Expected Claims Expected Expenses Risk Adjustment Onerous?
Motor Comprehensive 45,000 28,800 13,500 1,440 NO
Motor Third Party 32,000 24,000 8,000 1,200 YES (-1,200)
Fire & Burglary 18,000 9,000 5,400 450 NO

⚠️ NIC Requirement:

Onerous contract testing must be performed at inception and at each reporting date. Motor Third Party often shows as onerous due to regulated pricing.