As India’s life insurance sector prepares to adopt International Financial Reporting Standards (IFRS) accounting, leaders in the industry believe this shift will significantly change how growth and profitability are shown in financial results. Kamlesh Rao, MD and CEO of Aditya Birla Sun Life Insurance, said the move to IFRS-based reporting will make it easier to see the impact of sustained business growth and expanding margins over time, not just headline premium figures.
Under the current Indian GAAP framework, profit recognition and margin visibility for long-duration life insurance contracts often differ from global norms. The upcoming transition — expected to take shape over the next 2 years — will align India’s reporting practices with global standards, helping insurers present financials with greater clarity and comparability. IFRS 17, the standard focused on insurance contracts, requires insurers to update estimates of future cash flows using unbiased, probability-weighted values, improving how liabilities and profits are measured.
Rao highlighted that companies that combine “sustained compounding with expanding margins” are likely to benefit most under the new regime. He noted that while headline premiums remain important, the quality and sustainability of growth — backed by disciplined underwriting and margin strength — will be more clearly reflected in IFRS-based results. ABSLI’s business mix includes around ₹27,000–28,000 crore in group insurance and ₹80,000–82,000 crore in individual life insurance, demonstrating the dual engines supporting its growth strategy.
Industry experts also say the IFRS transition comes at a time when structural changes are underway across the sector, including evolving product economics, regulatory updates and capital framework reforms. As accounting norms change, life insurers may shift focus from short-term premium spikes to longer-term value creation. The new reporting standards are expected to enhance financial transparency and help investors better compare performance across companies and markets, ultimately supporting stronger growth narratives for Indian insurers on the global stage.
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