Pockets of panic are rampant among market participants as the reality of complying with IFRS 17 comes into focus, according to Mike Kelly, insurance sector lead at AutoRek.
As part of bobsguide’s InsurTech video series, Kelly was speaking on a panel focused on preparations for the new rules. He added that a lot of firms are in “full blown project mode, where they are putting their data through reconciliation tools and looking right across their entire businesses to see where the data is flowing.”
IFRS 17 represents one of the most significant changes to the insurance industry for some time. Scheduled to be applied for reporting periods from 2021, the regulation will have impacts on the financial disclosures of insurers as well as operational effects on all aspects of an organization.
“The large companies probably started two or three years ago,” said Michael Tripp, head of financial services and insurance partner at Mazars, also on the panel. “The mid-tier is coming in slightly slower and smaller companies can struggle.
“Boards of directors and senior management teams at these companies are aware of [IFRS 17] but don’t know what it entails. They’ve already been through the transition from GAP to Solvency II … and all of a sudden you’re going to get IFRS 17 coming in and it’s changing the whole dynamics of the financial system these leaders are having to deal with.”
Insurers will be expected to implement some extensive practical changes to respond to IFRS 17’s questions and requirements. But some believe the 2021 deadline can also be an opportunity for market participants to make much-needed improvements to their technology infrastructure. Watch the video to discover just how firms can take advantage of what can seem like an onerous compliance exercise.