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- Ping An Insurance Group. Head office: Shenzhen, China. Global ranking: 17th. Business lines: Life and non-life. Revenue: $181.37 billion. Net profit: $15.74 billion.
- UnitedHealth Group. Head office: Minnesota, USA. Global ranking: 22nd. Business lines: Life and health. Revenue: $297.55 billion. Net profit: $17.45 billion. Assets: $221.24 billion.
- Allianz. Head office: Munich, Germany. Global ranking: 35th. Business lines: Life and non-life. Revenue: $138.62 billion. Net profit: $7.81 billion. Assets: $1.324 trillion.
- AXA Group. Head office: Paris, France. Global ranking: 48th. Business lines: Life and non-life. Revenue: $145.19 billion. Net profit: $8.39 billion. Assets: $839.85 billion.
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Why is revenue recognition important for insurance companies?
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Which insurance companies are the best in 2022?
- UnitedHealth. UNH. $359.98 B. $476.57. 0.07% 🇺🇸 USA. 2.
- Cigna. CI. $189.86 B. $341.79. 0.28% 🇺🇸 USA. 3.
- Allianz. ALV.DE. $177.81 B. $283.39. 0.98% 🇩🇪 Germany. 4.
- Elevance Health. ELV. $171.34 B. $502.97. 0.28% 🇺🇸 USA. 5.
Sep 26, 2023 · To assess which companies are serving customers best during this difficult time, Forbes teamed up with market research firm Statista to generate our annual America’s Best Insurance...
May 13, 2021 · The Forbes Global 2000 ranking is based on a composite score from equally-weighted measures of revenue, profits, assets and market value. Among the world’s 25 largest insurers, the United States...
- ASC 606 CORE Principles
- Scope of ASC 606
- Timing of Revenue For Brokers, Agencies and Third-Party Administrators
- Warranty Contracts
- Other Topics
The core principle of the guidance in ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the followi...
Insurance-related services
Though insurance contracts within the scope of ASC 944 are excluded from ASC 606, as noted above, insurance entities may offer a single or combined product(s) or service(s) that could result in a customer contract being within the scope of both ASC 606 and ASC 944. In accordance with paragraph BC15 of ASU No. 2016-20, for contracts that are within the scope of ASC 944, the insurance entity should determine if elements of the contract should be accounted for within ASC 944 or ASC 606. If it is...
Combination of contracts
An insurance entity, such as a health insurer, may enter into an administrative services-only contract and an insurance contract at the same time with the same party. If either contract’s price was discounted from the insurance entity’s normal pricing practices, this may suggest a pricing interdependency under which these contracts may need to be treated as one arrangement. That is, although the combination of contracts guidance in ASC 606‑10‑25-9 is not applicable to contracts outside the sc...
The timing of revenue recognition for brokers and agencies will be materially impacted as these entities previously recognized revenue when received (contingent commissions) or at the later of the billing date or policy effective date. Under ASC 606, the policy effective date will now be the predominant date used for the recognition of revenue rela...
In accordance with ASC 606-10-15-2, an insurance entity should continue to apply the guidance in ASC 944 to warranty contracts that are within the scope of ASC 944 because they are written by an insurance entity. However, extended warranty contracts not written by an insurance entity, that meet the criteria in ASC 606-10-55-31, should be accounted ...
Contract costs
As stated in ASC 340-40-25-1, “an entity should recognize as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs.” ASC 340-40-25-2 explains that the incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission). ASC 340-40-25-3 further explains that costs to obtain a contra...
Contract asset or liability
Historically, when revenue was recognized but not yet billed, the entity recorded an asset for “unbilled accounts receivable.” When the billing was completed, the balance was then reclassified from unbilled to accounts receivable. ASC 606 creates a new concept called a contract asset, which generally replaces unbilled accounts receivable. A contract asset is recognized when control of a performance obligation is transferred to the customer before the customer pays consideration or before paym...
Disclosures
There are significant disclosure requirements in ASC 606. ASC 606-10-50-1 explains that the objective of the disclosure requirements is to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. To achieve that objective an entity should disclose qualitative and quantitative information about the following: 1. Contracts with customers — including revenue recognized, disaggregation of revenue...
comprehensive nonauthoritative revenue recognition guide (the Revenue Recognition AAG) that provides helpful discussion and illustrative examples on how to apply the guidance. The guide includes discussion of various topics that an insurance entity may encounter in its application of the guidance in ASC 606.
Revenue recognition is a vital aspect of financial accounting that determines when and how businesses record revenue from their sales transactions. For insurance companies, revenue recognition can be especially intricate due to factors such as policy premiums, claim reserves, and investment income.
