What are the key things to consider when implementing Insurance IFRS?
Organizations are only just starting to understand how to successfully approach the implementation of Insurance IFRS
1. General Considerations
Program management is at the heart of managing the impacts of IFRS for Insurance.
Organizations are only just starting to understand how to successfully approach the implementation of IFRS for Insurance; Key considerations for program management are:
- Impacts almost all areas of the organization and operating model
- Introduces new reporting concepts in IFRS 9, hedge accounting and Impairment
- Create programs with structure and methodology to prevent the evolution of large ‘monster’ projects
- Control the scope with defined outcomes
- Control the interdependencies and ensure cohesion across functions
- Manage the messages to key stakeholders
- Realize the Strategic Synergy Benefits (SSB’s) and economies of scale - gain maximum benefit from the mandatory spend
Creating the right program and governance framework will be a critical success factor, which is why Insights to IFRS Insurance is here to support you in the delivery of this challenge, by providing a practical guide with suggestions and observations.
2. Tax Considerations
- Generally, corporate income tax is based on Profit Before Tax (PBT) per the statutory accounts
- For jurisdictions where income tax is based on PBT, anything that affects the quantum of PBT is likely to have a tax consequence
- Solvency II requires insurers to re-complete deferred tax balances using IFRS rules applied to the Solvency II balance sheet. This doubles up the effects required during closing periods.
- Groups need to consider the impact of changes to the income tax calculation consequential on changes to accounting standards on their systems, processes, metrics, business planning etc