Deferring the effective date of IFRS 17 “Insurance Contracts” gave our clients some space to breathe. But with the finalisation of IFRS 17, now more than ever the pressure is back on. No more delays, no more time to push it down the line. Insurers are working hard on the implementation of IFRS 17 (and IFRS 9). With the experience gained over the last years on the implementations, and based on discussions both with our clients and within the network, we noted there were knowledge gaps within the industry.
As mentioned before by Gisele in her reflection on IFRS 17 and training; “transformation is related to empowerment” and, to ensure people are empowered, training is key.
The first gap that caused significant issues for a lot of insurers was reinsurance. Numerous insurers had postponed this topic due to its overall complexity. But also with a frail hope of possible simplifications for reinsurance that could come from the exposure draft, however no changes were made. With insurers now starting to look more closely at their reinsurance business, we aimed to have a training ready to get them started on it.
Another gap was on the PAA. Although most large insurers understood the topic well, smaller insurance more specifically focused on property and casualty insurance would be more likely to apply this approach. However we noted that these smaller insurance had not yet started much yet on the implementation efforts for IFRS 17. To enable these insurance companies to empower their employees with the proper insights in the standard we developed a training module specifically on the PAA.
The last two trainings we developed were focused on the knowledge gaps within the main two valuation approaches in IFRS 17. Clients mostly understood these principles by now, but what the implementation was showing more and more is that companies got stuck in the more intricate aspects. For example; applying the OCI option, how to account for onerous contracts or contracts becoming onerous etc. Working out practical examples for this turned out to be a challenge. A challenge we faced in the development of the e-learning modules as well, but we hope these new modules will help our clients to understand the concepts of these advanced topics.
Over the past few months we have seen a lot of new interest in these e-learnings, which shows how busy our clients currently are in upscaling their IFRS 17 projects and how these gaps are still present with a lot of insurers. If you recognise these gaps yourselves, please have a look at the modules on our PwC learning portal.
With all the complexities in IFRS 17, there is a lot of work to do and issues to resolve. With the use of our e-learnings, the understanding of the Standard does not need to be one of them.
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