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?
Undertaken by the Economist Intelligence Unit (EIU) on behalf of Deloitte, the 2018 Global IFRS Insurance 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.
- Just enough time to get ready. Global insurers are cautiously confident that they will meet the implementation date with 90% responding that they believe they will be compliant by 1 January 2021 (45% expressed a strong confidence level). Results varied by insurer type, with 60% of health insurers indicating they are very confident, while only 37% 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% 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% of insurers expect to spend more than €50M to meet compliance, compared with only 7% five years ago.