The clock begins ticking towards IFRS 17 implementation
IFRS 17 Insurance Contracts was issued by the IASB in May 2017 and applies to periods beginning on or after January 1, 2023.
At the time of publication, that implementation date may seem far away for so many insurance companies – but now, as they begin to embark in earnest on the journey, they discovered more and more the huge amount of work to do and the lack of time.
So, if you haven’t started your IFRS 17 transition project yet, let’s see why you should do it asap!
Our experts took part in a filmed Q&A session to outline the technical impacts of IFRS 17, the different approaches and give the recommended actions for insurers to have a smooth migration to IFRS 17.
Experts’ Talk on IFRS 17 transition
Key findings and recommendations insurers can act on now
The full impact of IFRS 17 will be felt for a long time, partly because KPIs and metrics will change. So, you must be aware of your transition decisions.
Several questions have been asked to Addactis’ experts Harry Nikolaou, Head of Accounting IFRS 17 and Kevin Poulard, Head of Actuarial R&D, to help insurers lead a proper IFRS 17 implementation, as follow:
➜ What challenges insurers face when transitioning to IFRS 17?
➜ What are the differences between the methods: Full Retrospective approach, Modified Retrospective approach, and Fair Value Retrospective Approach?
➜ How to choose the most appropriate approach to lead the transition between the current accounting standard to IFRS 17?
How can insurers prepare for the transition to IFRS 17
Our expert, Harry Nikolau, explained that IFRS 17, like any new standard, needs to be applied retrospectively. So, for that purpose, insurers need to calculate opening balances of the transition date which is one year earlier of the application date.
Based on the clients’ testimonials, the major challenge identified in their IFRS 17 implementation project, especially in the transition phase, is to find skilled people within the company for data interpretation, limitation, and methodology preparation, who can understand the calculations and the results and prepare the opening balances.
It is important to start earlier as possible to define the right approach, build the opening IFRS 17 balance sheet, take the time to analyze and understand the drivers of results and have sufficient time to test updated processes and controls.
I cannot stress enough how important it is for clients to involve and engage as early as possible in the process and leverage on their new systems and calculations that they have prepared for IFRS 17. This will also speed up the transition calculations.
If you are interested to know more about the challenges and experts’ tips on IFRS 17 transition, listen to our Experts’ Talk on IFRS 17 Transition that will help you meet IFRS 17 deadline and capitalize your existing process.