Insurers are facing a major overhaul of market reporting. This includes the launch of the Market Consistent Embedded Value Principles, planned move to a finalised IFRS standard for insurance contracts (IFRS Phase II) and the enhanced risk and capital management disclosure envisaged under EU Solvency II.
Even where they do not apply, these changes are likely to set a benchmark for global disclosure that others may need to follow, particularly in relation to risk. Key developments include the possible adoption of IFRS in the US from 2014.
Implementation of Solvency II and IFRS Phase reporting will be demanding. The good news is that parallels in the timings and bases of valuation could open up cost-saving synergies in areas such as data, assumption setting, modelling and reconciliation. The developments also offer an opportunity to strengthen stakeholder confidence by enabling insurers to convey a single view of their business that more closely reflects the way it is run internally.