When the new International Financial Reporting Standard 17 (IFRS 17) takes effect on January 1, 2021, it will upend decades-old insurance financial reporting standards. Though seemingly the tiniest glimmer on a distant horizon, navigating the intricacies of IFRS 17 will require painstaking planning and precision. Only insurers that act now put themselves on the best footing for success – and they now have the benefit of relying on analytics leader SAS to tackle the new standard head-on.
SAS® Regulatory Content for IFRS 17 provides for all of the requirements of IFRS 17 in one platform for users of all disciplines – actuaries, accountants and IT alike. The new solution is built on the same flexible, high-performance analytics environment that’s helping insurance firms meet Solvency II and the banking industry tackle its own regulatory disruption in IFRS 9. Key features include:
- Predefined, comprehensive data model.
- A powerful computation engine inclusive of IFRS 17’s required calculation methods (BBA/GMM, PAA and VFA approaches).
- Repeatable, customizable end-to-end processes those are fully transparent and auditable.
- Advanced financial reports with drill-down capabilities for accessing the details and source data behind the figures.
- Seamless integration with existing accounting and actuarial solutions.
“The disparate nature of incumbent accounting systems, actuarial tools and data sources, conventionally with weak workflow and integration capabilities, will pose a significant hurdle for insurers to overcome in complying with IFRS 17, particularly as many grapple with IFRS 9 compliance in tandem,” said Cubillas Ding, Research Director at Celent. “Beyond robust analytics and calculations optimized for performance, the imperative for insurers will be to bolster the integrity, transparency and governance of relevant data supply chains in an automated and industrialized manner, yet without compromising flexibility in adapting to methodological and system changes.”
Will insurers be ready for IFRS 17?
Issued by the International Accounting Standards Board (IASB) in May 2017, IFRS 17 redefines insurers’ accounting standards in more than 100 countries. Its primary objective is to increase industry transparency by improving comparability of financial statements across organizations – how each earns profits or incurs losses through underwriting services and investing customer premiums. Whatever the compliance approach, IFRS 17 will have a significant impact on financial performance, operational processes, and data and systems.
So how are insurers reacting to the forthcoming standard? Of 100 UK-based insurance executives surveyed by SAS in early 2018, 61 percent said they have already begun preparing for its mandates, with 19 percent declaring it a top strategic priority. Eighty-three percent indicated they will need to change existing systems and processes to comply with IFRS 17. And nearly half anticipate either making additional investments (24 percent) or replacing entirely their current systems and processes (23 percent). To delve deeper into the survey results, download the report.
