14.2.6.5. Transition date

The Group will apply IFRS 17 for the first time in the period beginning 1 January 2023. Due to the need to prepare comparative data, 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 (FRA) – a method in which an entity measures groups of insurance contracts as if the standard had been applied from the beginning for those contracts;
• modified retrospective approach (MRA) – a method that allows to apply simplifications to the FRA method if its full application is not feasible in practice;
• fair value approach – a method that is permitted, if the MRA method is not feasible in practice or if the entity has decided not to use the MRA method.

In accordance with the provisions of IFRS17 paragraph C3, unless it is impracticable to do so, the Group applies the full retrospective approach to the measurement of insurance contracts. In cases where the application of the full retrospective approach has been assessed as impracticable, the Group uses the modified retrospective approach or the fair value approach, and the choice of approach is made individually for each group of contracts. Factors such as group characteristics, the availability of historical data, materiality and whether the group of contracts belongs to the portfolio offered for sale by the Group as of the transition date are taken into account in the selection.

The Group plans to use the full retrospective approach for most groups of contracts and, in a few cases, the MRA method. However, the fair value approach will not be used for the valuation.