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Aptitude adds that it also shows that the majority of insurers are beginning to take action but they are still at a very early stage in the planning and implementation process, considering change programmes are expected to run for between 12 and 30 months.
According to the report, 92% of companies have yet to put their IFRS 17 solutions in place, 78% of companies are in the early research and impact analysis phase, and 88% of companies said they would need new processes to support IFRS 17 disclosure requirements.
Martin Redington, chief technology officer, Aptitude Software, commented: “IFRS 17 is the most significant change to insurance accounting that has ever taken place and is the latest of many pressures facing insurance CFOs. Insurance company profits are under duress as many sectors have become commoditised and many firms recognise the need to innovate their offerings and operations. In a post-IFRS 17 world, it will be difficult for CFOs to service the many financial and regulatory requirements without an approach that centralises control of reporting and financial data. IFRS 17 is already proving to be the straw that broke the camel’s back, driving insurance CFOs to modernise their financial systems.”
The GIRA report identifies a wide range of challenges that insurers need to overcome on their journey to implementation. It reveals that 84% of respondents cited having a disparate actuarial environment as being a constraint to delivering consistent calculations, and 88% of insurance companies highlighted that they would need new processes to support IFRS 17 financial disclosure requirements.
IFRS 17 is a new global accounting reporting standard for insurance contracts that affects every insurance company that reports under IFRS. Its purpose is to align insurance company reporting across the globe, says Aptitude. The GIRA report will be published bi-annually.
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