In March 2020, the IASB approved IFRS 17 effective date to be delayed another 12 months to January 1, 2023
Some national regulators have maintained their further deferrals to 2024 or even later.
As change management specialists, we will be supporting organisations as they navigate and implement the biggest change the insurance industry has seen in a generation. Now is the right time for insurers to confirm their planning, and to help, our team have been looking at the key milestones and considerations.
As with any IFRS change, insurers will be required to produce comparative accounts. The IASB has made a major concession to insurers; they will only be required to produce three balance sheets and two income statements for their first set of IFRS 17 accounts. This means that comparative accounts will only be mandatory for 2022. However, investors may demand more.
Most insurers have commenced some work on the technical aspects of IFRS 17 or started engagement with external suppliers, but not mobilized full size delivery teams. The number of people involved will climb steadily and peak in 2019 and 2020. Experienced resources are likely to be scarce and expensive during this period.
Now is a great time to check whether plans previously made are still right. Many insurers have placed emphasis on interpretation and calculation engines. Less effort has been put into:
a. resolving governance issues (such as the relationship between actuarial and accounting teams),
b. planning business processes or TOMs,
c. planning systems changes,
d. planning organization changes,
e. alignment of accounting policies across business units,
f. setting data standards,
g. or even setting up value-for-money procurements.
All of these are high priority and have no dependency on detailed interpretation of the standard. Effort can be re-focused on these to reduce time and costs later.
We are uncertain when investors will start to take notice of IFRS 17. However, when they do, demand for information is likely to increase, adding burden to finance, actuarial and investor relations teams. We'll be watching closely.