Countdown underway: Insurers prepare for IFRS 17 implementation

In May 2017 the International Accounting Standards Board (IASB) released its long-awited International Financial Reporting Standard 17 (IFRS 17 or the Standard). This marked the end of a multi-year process to produce the first comprehensive IFRS guidance for insurance contracts.

With IFRS 17, the IASB aims to establish one set of principles for the recognition, measurement, presentation and disclosure of insurance contracts. This goal is ambitious and it will take a great deal of effort for the Standard to be universally interpreted and adopted. Efforts to comply are driving substantial changes across many parts of insurers’ businesses – from actuarial and finance to product development and operations. Furthermore, due to the possibility that there will be different interpretations of how to implement the Standard across the over 100 jurisdictions in the world that will adopt, there is also concetn about how much diversity will emerge from its application.

This report aims at providing a comprehensive overview of how global insurers are reacting to and preparing for the adoption of the Standard. It assesses the industry’s views on the scale and complexity of the implementation challenge. The Economist Intelligence Unit surveyed 340 global insurers in February and March 2018, located across Canada, the UK, France, Italy, Germany, Japan, Switzerland, Spain, China, South Korea, the Neterlands and the US.

The respodent come from a range of insurance companies: 29% are non-life insurers, 20% are reinsurers, 18% are composite insurers, 18% are life insurers, and 15% are health insurers. Insurers are also grouped by net written premiums (NWP): 83 are very large insurers with more than €5bn NWP, 85 are large insurers with €1bn to €5bn NWP, 83 have €500m to €1bn NWP and 89 report €300m to €500m NWP. All respodents are director or vice-president level and above, and all currently work for a company that prepares financial statements in compliance with IFRS or that intends to comply with IFRS in the future.

Our research is based on a survey of 340 insurance executives including senior leaders in finance, actuarial and IT. The survey focuses mainly on the participants’ perception of the challenges of IFRS 17 implementation. With the overview of global insurers’ progresses in IFRS 17 implementation, we hope that the dometic insurers will benefit from this survey and can conduct their own planning in a comprehensive and confident way.