6.3.3. Transition date

The PZU Group applies IFRS 17 Insurance Contracts for the first time on 1 January 2023.

Due to the need to prepare comparative figures, 1 January 2022 is assumed as the date of transition to the new standard.

The standard allows the use of 3 methods for the purpose of measuring financial items at the transition date:

• full retrospective approach – a method in which the entity measures groups of insurance contracts as if the standard had been applied from the moment of the initial recognition for those contracts;
• modified retrospective approach – a method that allows the entity to apply simplifications to the FRA method if its full application is impracticable;
• fair value approach – a method that is permitted if the FRA method is impracticable or if the entity has decided not to use the MRA method.

The PZU Group has used all three methods depending on the availability of historical data. The full retrospective approach was applied for all groups of non-life insurance contracts, except for pre-1993 liabilities for incurred claims), for which the fair value approach was applied. The approaches applied to groups of life insurance contracts are laid out in the table below: