IFRS 17 Taking Insurance Companies to New Grounds
15 June 2016, 8:30 a.m. – 5:30 pm, The Westin Singapore
This new financial language will be spoken by all insurers that adopt IFRS regulations, thereby delivering consistency in the financial reporting for a sector that has never had it. In addition, it will introduce a significant degree of transparency that aims to open what many considered an accounting and actuarial black box.
However, most expect the exercise to be wide-ranging, complex and costly. Preparation will entail large teams of people working around the globe retooling not just IT systems, but the way that parts of the business – and even some insurance products – are structured.
IFRS 17 Taking Insurance Companies to New GroundsRegister here
One of the key goals of IFRS 4 Phase I was to increase transparency—through, for example, additional disclosure requirements. However, this was achieved only partially, because IFRS 4 Phase I permits the use of existing practices based on local GAAP for insurance accounting, companies cannot easily compare results internationally. IFRS 17 addresses this issue by eliminating inconsistencies and weaknesses in existing practices and providing comparability across entities, jurisdictions and capital markets.
IFRS 17 also outlines a comprehensive framework that will require insurers to provide information relevant to users of financial statements for economic decision making.
How it impacts you
The implementation of IFRS 17 will have a major impact across the entire financial management framework, requiring changes to key areas of strategic financial management and operations to deliver the results.
IFRS 17 provides insurers with general principles and flexibility on their implementation. Therefore, the choices that the insurer makes will impact how profits are released over the life of a contract.
The impact to Asian-based insurance organizations, whether subsidiaries of European insurers or domestic insurers, are significant given that many Asian countries have adopted IFRS and therefore would need to comply with the standard when issued. Unlike European insurers, Asian insurers would not be able to leverage their IFRS 17 solution from the technical alignment between IFRS and the new Solvency II regime that went live in 1 January 2016 across the European Union. Asian insurers will therefore have a different starting point in the absence of similar requirements by their local solvency regulators and need to factor into the cost the ability to report between their current regulatory bases and the more complex IFRS 17 requirements.
We look forward to having you at our seminar!