IFRS17 Global Testing – Common Pitfalls and Lessons Learnt
About the report
On or after 1 January 2023, the new accounting standard on insurance contracts (IFRS 17), will be effective. In order for this accounting standard to be adapted smoothly, finding a common and effective testing approach is important.
This report will deep-dive into some of the common challenges, sharing experience and lessons learnt. Furthermore, the report outlines the next steps in tackling these challenges internally by establishing a Global Testing Network.
A Global IFRS17 Testing Working Group has been setup which consists over 30 colleagues across Asia, Europe, Africa and the US to promote a consistent approach within Deloitte on IFRS17 testing.
The Global IFRS 17 Testing Working Group will define a common testing language, sharing experience and lessons learnt in test phases, data, validation tools, and working day timetable working, and eventually working together to tackling challenges.
Compare to other large scale and complex finance transformation projects within insurance industry, there are still some unique challenges when dealing IFRS 17:
- Results are not familiar to business owners
IFRS 17 is a new Standard and the results are not directly comparable to existing reporting bases.
- Huge volume of data
IFRS 17 is extremely data-intensive. The complexity and integration testing required compared to other finance transformation projects is exponentially higher.
- Transformation of the entire E2E operating model
Other projects may focus on one process or one system. IFRS 17 transforms the entire finance operating model, sometimes making it difficult to find the business owner.
- Need for cross-functional collaboration
IFRS 17 requires the collaboration of actuaries, accountants, IT and change specialists to transform the financial reporting function. However, functions often work in silo without a consistent, centralised approach. All professionals must be aligned to a common testing language and understanding