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The survey found that 97% of respondents expect IFRS 17 to increase the complexity and cost of operating in the industry when it comes into force, while 92% believe the new standard will improve financial transparency. It also found that 84% expect IFRS 17 to deliver additional benefits beyond compliance.
According to SAS: “IFRS 17 will fundamentally change the face of accounting. Insurance companies will have to report in greater depth on how insurance contracts affect their financial position. The regulation demands greater detail in financial analysis and increased cooperation between actuarial and accounting departments. While the standard does not come into force until January 2021, a majority (61%) have already started preparation for the changes and 19% classed it as a top strategic priority.”
The survey also found that 93% of respondents think IFRS 17 will completely change insurers’ business models, while 99% of insurers are confident they will have achieved compliance before the enforcement deadline. Only 12% of respondents view the regulation as solely a compliance exercise, with 87% of organisations believing the standard to be crucial for the survival of the insurance industry or that it will at least increase its robustness against future shocks.
According to SAS, while the financial impact of IFRS 17 will differ considerably between organisations, nearly all respondents (90%) are preparing for costs greater than those incurred by the Solvency II Directive.
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