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FINANCIAL REPORTING OF THE EFFECTS OF CLIMATE CHANGE ON INSURANCE CONTRACTS AND TFRS 17 STANDARD

Year 2022, Volume: 22 Issue: 67, 21 - 40, 06.09.2022

Sabrı Burak Arzova Bertaç Şakir Şahin

https://doi.org/10.55322/mdbakis.1054961

Abstract

The risks caused by climate change include economic, social, political and public health problems beyond physical effects. One of the important tools that used to protect against the financial effects of these risks is insurance activities. The insurance industry needs an accurate and risk-based reporting process in order to manage the effects of climate change, which includes risks and opportunities for insurance sector. In this study, the financial impact of climate change on insurance contracts is examined in terms of TFRS 17 Insurance Contracts standard. Including non-financial risk factors in the measurement process and reporting similar contracts as group contracts are positive regulations of standard in terms of reporting the financial effects of climate change. 

Keywords

Climate Change Financial Reporting Insurance TFRS 17

References

  • Anderson, N. (2019). IFRS Standards and climate-related disclosures. https://www.ifrs.org/content/dam/ifrs/news/2019/november/in-brief-climate-change-nick-anderson.pdf. (Erişim Tarihi: 12.11.2021).
  • AON. (2021). Weather, Climate & Catastrophe Insight. http://thoughtleadership.aon.com/Documents/20210125-if-annual-cat-report.pdf (Erişim Tarihi: 20.11.2021).
  • Aslan, H. (2015). Türkiye’de Tekafül (İslami Sigorta) Uygulamaları: Problemler Ve Çözüm Önerileri, Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi, 1(1), 93-117.
  • Bank of England. (2018). Climate Change and the Macro-Economy: a Critical Review. https://www.bankofengland.co.uk/working-paper/2018/climate-change-and-the-macro-economy-a-critical-review. (Erişim Tarihi: 19.10.2021).
  • Beck, U. (1992), Risk society : Towards a New Modernity, London: Sage Publications.
  • CDSB. (2017). Uncharted Waters. https://www.cdsb.net/sites/default/files/uncharted_waters_final.pdf (Erişim Tarihi: 20.10.2021).
  • CDSB. (2021). Accounting For Climate: Integrating Climate-Related Matters Into Financial Reporting. https://www.cdsb.net/sites/default/files/cdsb_climateaccountingguidance_2021_v4.pdf (Erişim Tarihi: 20.10.2021).
  • Clark, D., Kent, J., & Morgan, Ed. (2020). Impact of IFRS 17 on Insurance Product Pricing and Design, Milliman Report, MillimanInc., available at: https://us.milliman.com/en/insight/impact-of-ifrs-17-on-insurance-product-pricing-and-design.
  • Dahiyat, A., & Owais, W. (2021). The expected impact of applying IFRS (17) insurance contracts on the quality of financial reports. Accounting, 7(3), 581-590.
  • Fırat, E., & Kurtoğlu, R. (2014). Finans dünyasının krizler karşısındaki belirsizliği davranışsal ekonomi. Aksaray Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 7(2), 87-102.
  • Financial Times. (2021). Widespread Lapses in Climate Risk Reporting Found in Company Accounts. https://t.co/RBrx6hkVf4?amp=1 (Erişim Tarihi: 17.11.2021).
  • GAO. (2015). Better Management of Exposure to Potential Future Losses is Needed for Federal Flood and Crop Insurance. https://www.gao.gov/assets/gao-15-28.pdf (Erişim Tarihi: 17.11.2021).
  • Hahn, R., Reimsbach, D., & Schiemann, F. (2015). Organizations, climate change, and transparency: Reviewing the literature on carbon disclosure. Organization & Environment, 28(1), 80-102.
  • IFRS. (2017). IFRS 17 Standard Fact Sheet. https://www.ifrs.org/content/dam/ifrs/project/insurance-contracts/ifrs-standard/ifrs-17-factsheet.pdf (Erişim Tarihi: 19.11.2021).
  • IFRS. (2020). Effects of Climate-Related Matters on Financial Statements. https://www.ifrs.org/content/dam/ifrs/supporting-implementation/documents/effects-of-climate-related-matters-on-financial-statements.pdf (Erişim Tarihi: 19.11.2021).
  • IPCC. (2007). 4th Assestment Report https://www.ipcc.ch/site/assets/uploads/2018/03/ar4_wg2_full_report.pdf (Erişim Tarihi: 19.11.2021).
  • IPCC. (2021). AR6 Climate Change 2021: The Physical Science Basis. Https://Www.Ipcc.Ch/Report/Ar6/Wg1/ (Erişim Tarihi: 19.11.2021).
  • Jóhannsdóttir, L., Wallace, J., & Jones, A. (2012). The primary insurance industry’s role in managing climate change risks and opportunities. In Managing Climate Change Business Risks and Consequences: Leadership for Global Sustainability (pp. 51-79). Palgrave Macmillan, New York.
  • KGK. (2019). TFRS 17 Sigorta Sözleşmeleri. https://www.kgk.gov.tr/Portalv2Uploads/files/Duyurular/v2/TMS_TFRS_Setleri/2021/Kırmızı_Kitap/TFRS%2017.pdf. (Erişim Tarihi: 19.11.2021).
  • Linnenluecke, M. K., Birt, J., & Griffiths, A. (2015). The role of accounting in supporting adaptation to climate change. Accounting & finance, 55(3), 607-625.
  • Longoni, P. (2019). IFRS 17 Insurance Contracts and Firm Value. Available at SSRN. http://dx.doi.org/10.2139/ssrn.3589560. (Erişim Tarihi: 18.10.2021).
  • Milhaud, X., & Dutang, C. (2018). Lapse Tables For Lapse Risk Management in Insurance: A Competing Risk Approach. European Actuarial Journal, 8(1), 97-126.
  • Mills, E. (2005). Insurance in a climate of change. Science, 309(5737), 1040-1044.
  • Mustafa, O. (2019). UFRS 17 Sigorta Sözleşmeleri Kapsamında Öngörülen Ölçüm Yaklaşımlarından Genel Model Yaklaşımı Ve Bir Uygulama. Öneri Dergisi, 14(51), 190-215.
  • Negash, M. (2012). IFRS and environmental accounting. Management Research Review. 35(7), 577- 601.
  • Oğuz, M. (2018). Sigorta Sözleşmelerinin Muhasebeleştirilmesi Ve Raporlanmasına İlişkin Olarak Ufrs/Tfrs 4 Ve Ufrs 17 Standartlarının Karşılaştırılması. Ida Academia Muhasebe ve Maliye Dergisi, 2(1), 67-116.
  • Oğuz, M. (2019). UFRS 17 Sigorta Sözleşmeleri Kapsamında Öngörülen Ölçüm Yaklaşımlarından Genel Model Yaklaşımı Ve Bir Uygulama. Öneri Dergisi, 14(51), 190-215.
  • Owais, W. O., & Dahiyat, A. A. (2021). Readiness and Challenges for Applying IFRS 17 (Insurance Contracts): The Case of Jordanian Insurance Companies. The Journal of Asian Finance, Economics and Business, 8(3), 277-286.
  • Öçal, A. (1971). Sigortacılığın İktisadi Önemi. Eskişehir İktisadi ve Ticari İlimler Akademisi Dergisi, 7(1), 43-55.
  • Öktem, B. Karbon Emisyon İşlemlerinin Muhasebeleştirilmesi. Finans Ekonomi Ve Sosyal Araştırmalar Dergisi, 5(2), 313-323.
  • Scholten, R., Lambooy, T., Renes, R., & Bartels, W. (2020). The Impact of Climate Change in the Valuation of Production Assets via the IFRS Framework. Accounting, Economics, and Law: A Convivium, 10(2), 1-33.
  • Soydemir, S. (2011). Modernizmin Karanlik Yüzü: Risk Toplumu. Sosyal ve Beşeri Bilimler Dergisi, 3(2), 169-178.
  • Temelli, F. (2019). Evaluation Of Environment Accounting In Terms Of Turkish Accounting Standards (TAS). Bitlis Eren Üniversitesi Sosyal Bilimler Dergisi, 8(1), 224-241.
  • TFCD. (2017). Recommendations of the Task Force on Climate-related Financial Disclosures https://assets.bbhub.io/company/sites/60/2021/10/FINAL-2017-TCFD-Report.pdf (Erişim Tarihi: 19.11.2021).
  • Toma, S.-V., Chiriţă, M., & Şarpe, D. (2012). Risk and uncertainty. Procedia Economics and Finance, 3, 975-980.
  • Tucker, G., Sedelnikova, I., Saslow, M., Meurer, H., & Coughlan, A. (2017). IFRS 17 Marks A New Epoch For Insurance Contract Accounting. PricewaterhouseCoopers No. INT2017-04.
  • Warwick, P., & Ng, C. (2012). The ‘cost’of climate change: how carbon emissions allowances are accounted for amongst European Union companies. Australian Accounting Review, 22(1), 54-67.
  • WEF. (2020). Global Risks Report. https://www3.weforum.org/docs/WEF_Global_Risk_Report_2020.pdf (Erişim Tarihi: 19.11.2021).
  • Yanık, S. & Ece, B. (2017). Evaluation of IFRS 17 insurance contracts standards for insurance companies. PressAcademia Procedia, 6(1), 48-50.
  • Yıldırım, A., Eryılmaz, C., & Büyükarıkan, U. (2020) Sigorta Sözleşmeleri Standardına Göre Sigorta Muhasebesi. Karadeniz Sosyal Bilimler Dergisi, 12(23), 534-548.

İKLİM DEĞİŞİKLİĞİNİN SİGORTA SÖZLEŞMELERİNE ETKİLERİNİN FİNANSAL RAPORLAMASI VE TFRS 17 STANDARDI

Year 2022, Volume: 22 Issue: 67, 21 - 40, 06.09.2022

Sabrı Burak Arzova Bertaç Şakir Şahin

https://doi.org/10.55322/mdbakis.1054961

Abstract

İklim değişikliğinin neden olduğu riskler fiziksel etkilerin ötesinde ekonomik, sosyal, siyasal ve halk sağlığı açısından sorunlara sebep olmaktadır. Bu risklerin finansal etkilerinden korunmak için kullanılan önemli araçlardan biri de sigortacılık faaliyetleridir. Sigortacılık sektörünün kendisi için risk ve fırsatları barındıran iklim değişikliğinin etkilerini iyi bir şekilde yönetebilmesi için doğru ve risk temelli bir raporlama sürecine ihtiyacı vardır. Bu çalışmada iklim değişikliğinin sigorta sözleşmeleri üzerindeki finansal etkisi TFRS 17 Sigorta Sözleşmeleri standardı açısından ele alınmıştır. Standardın finansal olmayan risk unsurlarını da ölçüm sürecine dahil etmesi ve benzer nitelikteki sözleşmelerin grup sözleşme olarak raporlanması iklim değişikliğinin finansal etkilerinin raporlanması açısından olumlu düzenlemelerdir. 

Keywords

İklim Değişikliği Finansal Raporlama Sigortacılık TFRS 17

References

  • Anderson, N. (2019). IFRS Standards and climate-related disclosures. https://www.ifrs.org/content/dam/ifrs/news/2019/november/in-brief-climate-change-nick-anderson.pdf. (Erişim Tarihi: 12.11.2021).
  • AON. (2021). Weather, Climate & Catastrophe Insight. http://thoughtleadership.aon.com/Documents/20210125-if-annual-cat-report.pdf (Erişim Tarihi: 20.11.2021).
  • Aslan, H. (2015). Türkiye’de Tekafül (İslami Sigorta) Uygulamaları: Problemler Ve Çözüm Önerileri, Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi, 1(1), 93-117.
  • Bank of England. (2018). Climate Change and the Macro-Economy: a Critical Review. https://www.bankofengland.co.uk/working-paper/2018/climate-change-and-the-macro-economy-a-critical-review. (Erişim Tarihi: 19.10.2021).
  • Beck, U. (1992), Risk society : Towards a New Modernity, London: Sage Publications.
  • CDSB. (2017). Uncharted Waters. https://www.cdsb.net/sites/default/files/uncharted_waters_final.pdf (Erişim Tarihi: 20.10.2021).
  • CDSB. (2021). Accounting For Climate: Integrating Climate-Related Matters Into Financial Reporting. https://www.cdsb.net/sites/default/files/cdsb_climateaccountingguidance_2021_v4.pdf (Erişim Tarihi: 20.10.2021).
  • Clark, D., Kent, J., & Morgan, Ed. (2020). Impact of IFRS 17 on Insurance Product Pricing and Design, Milliman Report, MillimanInc., available at: https://us.milliman.com/en/insight/impact-of-ifrs-17-on-insurance-product-pricing-and-design.
  • Dahiyat, A., & Owais, W. (2021). The expected impact of applying IFRS (17) insurance contracts on the quality of financial reports. Accounting, 7(3), 581-590.
  • Fırat, E., & Kurtoğlu, R. (2014). Finans dünyasının krizler karşısındaki belirsizliği davranışsal ekonomi. Aksaray Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 7(2), 87-102.
  • Financial Times. (2021). Widespread Lapses in Climate Risk Reporting Found in Company Accounts. https://t.co/RBrx6hkVf4?amp=1 (Erişim Tarihi: 17.11.2021).
  • GAO. (2015). Better Management of Exposure to Potential Future Losses is Needed for Federal Flood and Crop Insurance. https://www.gao.gov/assets/gao-15-28.pdf (Erişim Tarihi: 17.11.2021).
  • Hahn, R., Reimsbach, D., & Schiemann, F. (2015). Organizations, climate change, and transparency: Reviewing the literature on carbon disclosure. Organization & Environment, 28(1), 80-102.
  • IFRS. (2017). IFRS 17 Standard Fact Sheet. https://www.ifrs.org/content/dam/ifrs/project/insurance-contracts/ifrs-standard/ifrs-17-factsheet.pdf (Erişim Tarihi: 19.11.2021).
  • IFRS. (2020). Effects of Climate-Related Matters on Financial Statements. https://www.ifrs.org/content/dam/ifrs/supporting-implementation/documents/effects-of-climate-related-matters-on-financial-statements.pdf (Erişim Tarihi: 19.11.2021).
  • IPCC. (2007). 4th Assestment Report https://www.ipcc.ch/site/assets/uploads/2018/03/ar4_wg2_full_report.pdf (Erişim Tarihi: 19.11.2021).
  • IPCC. (2021). AR6 Climate Change 2021: The Physical Science Basis. Https://Www.Ipcc.Ch/Report/Ar6/Wg1/ (Erişim Tarihi: 19.11.2021).
  • Jóhannsdóttir, L., Wallace, J., & Jones, A. (2012). The primary insurance industry’s role in managing climate change risks and opportunities. In Managing Climate Change Business Risks and Consequences: Leadership for Global Sustainability (pp. 51-79). Palgrave Macmillan, New York.
  • KGK. (2019). TFRS 17 Sigorta Sözleşmeleri. https://www.kgk.gov.tr/Portalv2Uploads/files/Duyurular/v2/TMS_TFRS_Setleri/2021/Kırmızı_Kitap/TFRS%2017.pdf. (Erişim Tarihi: 19.11.2021).
  • Linnenluecke, M. K., Birt, J., & Griffiths, A. (2015). The role of accounting in supporting adaptation to climate change. Accounting & finance, 55(3), 607-625.
  • Longoni, P. (2019). IFRS 17 Insurance Contracts and Firm Value. Available at SSRN. http://dx.doi.org/10.2139/ssrn.3589560. (Erişim Tarihi: 18.10.2021).
  • Milhaud, X., & Dutang, C. (2018). Lapse Tables For Lapse Risk Management in Insurance: A Competing Risk Approach. European Actuarial Journal, 8(1), 97-126.
  • Mills, E. (2005). Insurance in a climate of change. Science, 309(5737), 1040-1044.
  • Mustafa, O. (2019). UFRS 17 Sigorta Sözleşmeleri Kapsamında Öngörülen Ölçüm Yaklaşımlarından Genel Model Yaklaşımı Ve Bir Uygulama. Öneri Dergisi, 14(51), 190-215.
  • Negash, M. (2012). IFRS and environmental accounting. Management Research Review. 35(7), 577- 601.
  • Oğuz, M. (2018). Sigorta Sözleşmelerinin Muhasebeleştirilmesi Ve Raporlanmasına İlişkin Olarak Ufrs/Tfrs 4 Ve Ufrs 17 Standartlarının Karşılaştırılması. Ida Academia Muhasebe ve Maliye Dergisi, 2(1), 67-116.
  • Oğuz, M. (2019). UFRS 17 Sigorta Sözleşmeleri Kapsamında Öngörülen Ölçüm Yaklaşımlarından Genel Model Yaklaşımı Ve Bir Uygulama. Öneri Dergisi, 14(51), 190-215.
  • Owais, W. O., & Dahiyat, A. A. (2021). Readiness and Challenges for Applying IFRS 17 (Insurance Contracts): The Case of Jordanian Insurance Companies. The Journal of Asian Finance, Economics and Business, 8(3), 277-286.
  • Öçal, A. (1971). Sigortacılığın İktisadi Önemi. Eskişehir İktisadi ve Ticari İlimler Akademisi Dergisi, 7(1), 43-55.
  • Öktem, B. Karbon Emisyon İşlemlerinin Muhasebeleştirilmesi. Finans Ekonomi Ve Sosyal Araştırmalar Dergisi, 5(2), 313-323.
  • Scholten, R., Lambooy, T., Renes, R., & Bartels, W. (2020). The Impact of Climate Change in the Valuation of Production Assets via the IFRS Framework. Accounting, Economics, and Law: A Convivium, 10(2), 1-33.
  • Soydemir, S. (2011). Modernizmin Karanlik Yüzü: Risk Toplumu. Sosyal ve Beşeri Bilimler Dergisi, 3(2), 169-178.
  • Temelli, F. (2019). Evaluation Of Environment Accounting In Terms Of Turkish Accounting Standards (TAS). Bitlis Eren Üniversitesi Sosyal Bilimler Dergisi, 8(1), 224-241.
  • TFCD. (2017). Recommendations of the Task Force on Climate-related Financial Disclosures https://assets.bbhub.io/company/sites/60/2021/10/FINAL-2017-TCFD-Report.pdf (Erişim Tarihi: 19.11.2021).
  • Toma, S.-V., Chiriţă, M., & Şarpe, D. (2012). Risk and uncertainty. Procedia Economics and Finance, 3, 975-980.
  • Tucker, G., Sedelnikova, I., Saslow, M., Meurer, H., & Coughlan, A. (2017). IFRS 17 Marks A New Epoch For Insurance Contract Accounting. PricewaterhouseCoopers No. INT2017-04.
  • Warwick, P., & Ng, C. (2012). The ‘cost’of climate change: how carbon emissions allowances are accounted for amongst European Union companies. Australian Accounting Review, 22(1), 54-67.
  • WEF. (2020). Global Risks Report. https://www3.weforum.org/docs/WEF_Global_Risk_Report_2020.pdf (Erişim Tarihi: 19.11.2021).
  • Yanık, S. & Ece, B. (2017). Evaluation of IFRS 17 insurance contracts standards for insurance companies. PressAcademia Procedia, 6(1), 48-50.
  • Yıldırım, A., Eryılmaz, C., & Büyükarıkan, U. (2020) Sigorta Sözleşmeleri Standardına Göre Sigorta Muhasebesi. Karadeniz Sosyal Bilimler Dergisi, 12(23), 534-548.
There are 40 citations in total.

Details

Primary Language Turkish
Subjects Business Administration
Journal Section Research Articles
Authors

Sabrı Burak Arzova 0000-0001-9616-4197

Bertaç Şakir Şahin 0000-0003-0414-5402

Publication Date September 6, 2022
Submission Date January 7, 2022
Acceptance Date June 22, 2022
Published in Issue Year 2022 Volume: 22 Issue: 67

Cite

APA Arzova, S. B., & Şahin, B. Ş. (2022). İKLİM DEĞİŞİKLİĞİNİN SİGORTA SÖZLEŞMELERİNE ETKİLERİNİN FİNANSAL RAPORLAMASI VE TFRS 17 STANDARDI. Muhasebe Ve Denetime Bakış, 22(67), 21-40. https://doi.org/10.55322/mdbakis.1054961
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