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Global IFRS Insurance Survey 2018
2021 countdown underway: Insurers prepare for IFRS 17 implementation
A year after the publication of IFRS 17 Insurance Contracts (IFRS 17), and with just over two years until its mandatory effective date of 1 January 2021, how are global insurers preparing to operate in the new financial reporting regime?
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The 2018 Global IFRS Insurance Survey aims to provide a comprehensive and independent overview of how global insurers are reacting to and preparing for IFRS 17 adoption.
Undertaken by the Economist Intelligence Unit (EIU) on behalf of Deloitte, the survey explores the views of 340 senior insurance executives from across North America, Europe and Asia on the scale and complexity of IFRS 17 implementation challenges surrounding its budgeting, the technology needed to comply, and the availability of resources to deliver the change.
Key takeaways:
- Just enough time to get ready
Global insurers are cautiously confident that they will meet the implementation date with 90 percent responding that they believe they will be compliant by 1 January 2021 (45 percent expressed a strong confidence level). Results varied by insurer type, with 60 percent of health insurers indicating they are very confident, while only 37 percent of life insurers responded with the same level of certainty. From a regional perspective, Europe is more confident than other regions. - Upgrading technology is necessary
87 percent of insurers believe their systems technology will require upgrades to capture the new data and perform the calculations required for compliance. Capturing data inputs was also cited as the largest technology challenge. - Significant implementation costs have been budgeted
The majority of insurers have now set some expectations around budget, with results showing the expected spend to be significantly greater than expectations captured in 2013. 35 percent of insurers expect to spend more than €50M to meet compliance, compared with only 7 percent five years ago.
About the survey
Deloitte commissioned the EIU to conduct a global survey of 340 senior insurance executives and obtain the perspectives of a number of industry professionals in February and March 2018, to access insurers' views on the scale and complexity of the implementation challenge.
The geographical coverage of respondents includes Canada, the UK, France, Italy, Germany, Japan, Switzerland, Spain, the Netherlands, China, South Korea and the US. The survey covers a wide range of insurance businesses, including life, non-life, composite, health and reinsurance companies, of varying size measured by net written premium to ensure our insights are representative of the views of all insurance companies subject to IFRS regulations.
The 2018 survey is the third in a series tracking the insurance industry's journey and sentiment towards the adoption of IFRS 17. The first, Winning the waiting game?, was released in 2012, while the second survey, Gaining momentum, was published after the International Accounting Standards Board (IASB) released the second exposure draft on the new IFRS on insurance contracts in June 2013.