Deloitte in the news
Insurers looking ways to synergise accounting and regulatory reporting efforts
Francesco Nagari, Global IFRS Insurance Leader at Deloitte, recently provided his insights to Risk.net as implementation of International Financial Reporting Standards (IFRS) 17 "Insurance Contracts" has met more hitch than expected and the schedule to make the new rules effective will move by twelve months from 1 January 2021 to 2022. The change does not seem to have impacted the strategic focus of insurers who plan to report their financial performances under IFRS 17.
Insurers in Europe already invested heavily in people, data and systems to meet the Directive of Solvency II that came into force in 2016. It is reasonable that these insurers would like to make the maximum use of what they have got in place to meet the new accounting requirements.
"European insurers already have to comply with the stringent Solvency II regime, and we know for sure that our European clients all have a strategic goal in mind – that is, the integration of Solvency II and IFRS requirements in terms of implementation work. This is of the utmost importance in terms of how they will manage these requirements across data and people and systems," explained Mr Nagari.
As a risk-based system, the Solvency II is about evaluating the prudence level of the insurer or, in other words, the impact in the event it goes to bankrupt. The IFRS 17 intends to provide a more consistent global accounting model for insurers and investors can thus have a better comparison among insurers issuing different types of insurance contracts in a more meaningful way. The two rules have varied goals yet there are several converging requirements in implementation. Two pillars out of three in an efficient solvency system ─ governance and supervision as well as reporting and disclosure ─ can be useful to insurers as they prepare to be IFRS 17-aligned by 1 January 2022.
The full report is available here.
Contact the Deloitte IFRS 17 professional teams in Hong Kong and Mainland China to know more about how we can assist your organisation in the path of the IFRS 17 implementation and a broader uplift of assurance, risk and actuarial management.