The new International Financial Reporting Standard (IFRS 17) for insurance contract accounting –previously known as IFRS 4 Phase II is now closer to finalisation after many years of research and drafting.
IFRS 17 will be introduced effective January 1, 2021 as a much needed, robust standard. It serves to address the challenges found in the current standard, IFRS 4, which allows a myriad of different accounting policies, thus resulting in a lack of comparability even within insurance groups.
The financial and operational implications from adoption of IFRS 17 will vary by entity. However, the new standard is expected to bring about pervasive changes for insurers, especially in the areas of:
“Gearing up for a paradigm shift - Are you prepared for IFRS17?” explains the implications of this new reporting standard for insurers and regroups some key learnings from some of the early adopters.
The following paper is an overview of the key features of IFRS 17, the challenges and learning points, as well as suggestions on how insurers can pragmatically approach the implementation of the new standard.