Let's take a look at a set of IFRS P&C financial statements, and in particular, how they differ to the US GAAP layout.

We'll start with the income statement.

Firstly, we see that there aren't any premiums referenced.

This is because IFRS refers to the premiums earned as insurance revenue.

Also, IFRS requires insurance revenue to be presented gross of any premiums paid to reinsurers.

Secondly, we see that there isn't a claims expense or policy acquisition cost referenced.

This is because IFRS refers to all of these as insurance service expenses, and these are included in aggregate below insurance revenue.

We then see the net expense associated with reinsurance. That's the premiums paid to reinsurers net of claims recovered from reinsurers.

When we add the insurance revenues, insurance expenses, and net expense of reinsurance, this gives the insurance service result, which is effectively the underwriting profit.

IFRS then includes the investment return below the insurance service result, and then central operating costs and finance costs to give profit before tax, which is a required subtotal under IFRS.

After deducting the tax expense, we have net income.

So the key difference for IFRS is that reinsurance is included separately in the income statement, and that IFRS presents underwriting income and expenses separately from other items of income and expense.

Now let's take a look at the balance sheet.

The key thing to note here is that although this is a slightly simplified balance sheet, it is much more aggregated than a US GAAP balance sheet with fewer line items.

Firstly, we notice that there are no deferred acquisition costs in an IFRS balance sheet, and that's because they are deducted from insurance reserves and included net within liabilities, rather than be included as a separate asset in the balance sheet.

Secondly, we notice that we have a single line for reinsurance assets rather than showing reinsurance recoverables and prepaid reinsurance premiums as separate line items. So IFRS requires these to be aggregated together and shown as a single reinsurance asset.

Thirdly, we also notice that there is no unearned premiums reserve or claims reserve in liabilities, and that's because IFRS requires these liabilities to be aggregated together and referred to as insurance contract liabilities.

Remember that this is also net of deferred acquisition costs.

So effectively, insurance contract liabilities reflect the net future revenues and expenses associated with insurance policies. This is also consistent with the presentation of reinsurance assets, which are also treated as a single asset in the balance sheet.

The other items are similar to those in a US GAAP balance sheet, so don't require any additional explanation.