7+1 reasons to get interested in IFRS17
The IASB (International Accounting Standards Board) ended a long and difficult journey to the new standard of insurance contracts with the announcement of the IFRS17. The aim of the standard-setting is to harmonize the reporting procedures in the insurance sectors with other industries' practices.
Our experts listed 8 reasons, why you should get interested of the IFRS17.
The implementation of IFRS17 needs great efforts until the deadline, 1st January, 2021, thus you should start the preparation in time. Regarding the need for the change, the following question arose:
- What are the main practical challenges associated with the implementation of IFRS 17?
- Is the Hungarian insurance market different from ot her markets regarding the new reporting standard?
These are the main aspects of the requirements that may cause great concerns and problems, and give you at least 7 good reasons to get interested in IFRS17:
- Select a pricing model and set a contractual Service Margin (CSM)
- Specify groups of contracts to be separate units of account
- Adapt accounting, actuarial and information systems in terms of the ability to set a service margin and depreciation for individual accounting units
- Define the Risk Adjustment methodology
- Changes in the reporting of reinsurance contracts
- Choose the best methodology for recognizing an existing portfolio in accordance with new rules
- New form of reporting, required disclosures and the need of adjustments of existing management reports and key accounting indicators
+1 Deloitte helps you to prepare a smooth implementation
Deloitte Hungary launched a series of seminar about the appliance of IFRS17 for the representatives of Hungarian life and non-life insurance companies to help them become more familiar with the requirements.
Two seminars were already held this year. The majority of the audience was already aware of the new standard and some of its principles, although from a high-level point of view only and therefore a slightly more detailed review was really welcome. During the seminars many questions arose showing also the relevance and importance of the new standard. Additionally, it also indicated the willingness for additional follow-ups. Based on the participants’ replies, the companies would be also interested in a more detailed analysis with real life examples and Deloitte Hungary plans to continue accordingly in the upcoming months.
Stayed tuned for the next event from the IFRS 17 series, which we will announce shortly.