Financial reporting in the insurance industry
With the financial crisis having intensified the competition for capital and heightened the critical glare of market scrutiny, we felt that it would be useful to find out whether investment professionals believe that the ‘adequacy gap’ between their expectations and current practice has widened or narrowed since 2007 (our last global analyst survey). So in September 2009, PwC interviewed more than 40 investment professionals to understand their thoughts on the current state of insurance reporting and its future direction. Findings reveal widespread dissatisfaction with the current state of financial reporting. Many participants, especially life insurance analysts using IFRS, would like the IASB to move to a revised reporting framework as quickly as possible. While recognising the difficulties of developing solutions for such a diverse and complex industry, many would encourage standard setters to put pragmatism before theoretical precision.
This report highlights the key findings from the survey covering the current state of insurance reporting, the future direction of the accounting for insurance contracts, the future direction of the measurement and classification of financial instruments and timings of implementation.