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IFRS 17 Readiness Survey (Malta)


In May 2017 the International Accounting Standards Board issued IFRS 17 (‘Insurance Contracts’). Subject to EU endorsement, this standard will revolutionise accounting for insurance contracts and the standard will apply for financial periods beginning on or after 1 January 2023 (with the requirement to restate comparatives). 

At the time of writing, insurers have less than two years left to implement IFRS17 and, as earlier movers have already appreciated, the transition process is an intensive one. It’s now time to accelerate all implementation projects! PwC has been assisting many license holders to navigate the requirements of this intricate standard. We are pleased to share the aggregated responses from our recent survey of the Maltese market.


PwC in Malta ran this survey during the second half of 2020. Participants of the survey consisted of insurance companies registered with the Malta Financial Services Authority (“MFSA”). We received a total of 45 responses from entities which varied in size and business type. Further information about respondents is presented below:

  • 40% of total respondents issue contracts with a duration of greater than 12 months.

  • 89% of total respondents write business predominantly outside Malta.

  • 71% of total respondents make use of the services of an insurance manager in relation to their finance function.

  • Respondents included a good mix of smaller and larger insurers, writing up to €4million (33% of respondents) and over €40million of premium (45% of respondents), respectively.

  • 31% of respondents indicated that they will be making use of the premium allocation approach (“PAA”) only, 7% will solely adopt the General Measure Model (“GMM”) and 18% have indicated they will make use of a combination of 2 or more approaches. The remaining 44% responded that they do not yet know.

Level of Preparedness & IFRS 17 Systems Considerations

IFRS 17 is effective for financial periods beginning on or after 1 January 2023 (subject to EU endorsement). We asked respondents to indicate their level of preparedness in this regard.

  • 67% of respondents were very confident that their implementation will be ready for the current effective date 1 January 2023, with the remainder split between having some or most aspects still outstanding.
  • The local regulator asked companies to submit an impact assessment by the end of 2020 which included a request for financial impacts. As of September 2020 almost a third of respondents indicated that they had not yet started working on this. Only 2% had completed the exercise.

IFRS 17 Systems Considerations

  • 31% of respondents have not yet evaluated whether their current systems are fit for purpose.
  • Respondents who had completed their system evaluation (69%) were further asked to elaborate on the outcome of this process. They responded as follows:
  • 33% of total respondents indicated that they have selected a systems vendor, 44% have not selected a vendor but have started discussions with vendors and the remainder had not yet entered into discussions with potential vendors

Skills and Resources

The implementation of IFRS17 is considered by many in the industry to be a challenging task. This section considers respondents' views in relation to the company’s (human) resources, strategy for implementation, and expectations around implementation costs.

  • 64% of respondents are not planning to increase headcount as a direct result of IFRS17. This is more pronounced for captive insurers. 
  • 73% of respondents do not have a process for estimating the cost of implementing IFRS17 or the process is only an indicative one. 
  • When comparing expected IFRS 17 implementation costs to that of Solvency II respondents answered as follows: 
  • It was interesting to stratify the responses by the respondents' expected IFRS 17 measurement approaches. We have noted that respondents that are planning to make use of Variable Fee Approach (VFA) indicated that they will also be using the GMM. 
  • Irrespective of model choice, insurance entities which make use of the services of an insurance manager in relation to finance anticipate a lower investment for IFRS17 as compared to Solvency II. On the other hand, 77% of unmanaged entities believe that their investment in IFRS17 will surpass or be similar to that of Solvency II.
  • When asked which department leads the IFRS17 implementation project, results varied. Being a standard with cross functional implications, it is unsurprising that the most popular response was that a blended function leads the IFRS 17 project. This was closely followed by an equal 29% of respondents stating that their actuarial and finance functions respectively lead the project, The remaining 6% of respondents indicated that the project is led by external parties or by their Group.
  • It was interesting to note that on the basis of responses received, actuarial functions are perceived to have the most ‘advanced’ level of understanding of this accounting change. Boards and Committees on the other hand have a clear need to upskill with 64% of respondents indicating that knowledge is limited.
  • Respondents were asked to indicate which stakeholders they are involving in their  IFRS17 project and could select more than one option. Over 87% of respondents are involving their actuarial, accounting, and IT operations teams. Some respondents also indicated that they are involving other teams including: risk; operations, underwriting and claims; and the board.
  • Respondents were asked to indicate the level of challenge posed by a number of areas and they responded as follows:

We would also like to thank all our survey respondents for taking the time to complete the survey. Their responses remain confidential.

How PwC can help ?

PwC in Malta has a cross disciplinary team consisting of accountants, actuaries, IT and Tax professionals who are well versed in the intricacies of IFRS17. PwC is currently working with a number of insurers in Malta and our team of local experts is well linked with our global team, thereby leveraging on the experience gained on over 250 projects. PwC is well placed to assist you with numerous areas of your implementation project, including: gap and impact assessments, assistance with drafting accounting and position papers, PAA eligibility testing, financial impact assessments, proactive assurance, vendor assistance, systems support (via our market leading IFRS 17 In a Box solution), managed service offering and more.

Contact us

Romina Soler

Romina Soler

Assurance Partner, PwC Malta

Tel: +356 2564 7293

Christopher  Cardona

Christopher Cardona

Assurance Partner, PwC Malta

Tel: +356 2564 2610

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