IFRS 17: Jump start your IFRS 17 project

25 February 2019

In mid-February, my PwC IFRS 17 colleagues in the UK and I were joined by over 30 clients who expressed an interest in hearing more about what we have collectively learnt from the 140 projects that we are currently involved in, and the current position of other global Insurers on their respective IFRS 17 journeys. At such a busy time of year for Insurers, it is great to see that there is still a high demand to compare journeys and progress with peers in the market. A decent proportion of clients are not letting this reporting period be 3 months lost in their IFRS 17 programs.

Our main points from an accounting perspective included the importance of endorsement of the standard from the EU, and given the British audience, how Brexit might impact this. It will be an interesting turn of events if the UK industry was not exactly in favour of the standard, got ready for its implementation and then Brexit results in the UK not adopting it. That’s not what we expect, but who knows! There’s a long way to go on Brexit, so let’s see what the future unfolds. Also, one of the most significant issues is yet to be discussed by the IASB, namely the level of aggregation. March should bring some certainty here.

We addressed what we have seen in terms of how Insurers intend to spend the extra year, and how governance is impacting the success of IFRS 17 implementation plans. A growing tension can often exist between local teams and stakeholders at the Group level, as the subsidiaries running BAU are focused on creating solutions to satisfy the regulator rather than following the Group IFRS 17 strategy. This issue is exacerbated by an imbalance in stakeholder vs. business engagement in the IFRS 17 projects - adequate representation from all parts of the business in your IFRS 17 team, not just those in Finance, is essential to ensure your final solution is fit-for-purpose.

Interestingly, as clients get into the detail of implementation, an emerging issue is the difficulty in harnessing data, and the constant shortage of IT expertise available on the market. Data remains one of the most unexplored areas of the IFRS 17 journey, and as such, it is one of the areas that will require most attention over the coming years, hence internal upskilling is one option that can be employed to tackle the resource constraints. Our recommendation was to take IT departments on the IFRS 17 journey from the very start, as the specific IFRS 17 approach selected by the business needs to be adjusted based on technology choices, so it is really advantageous to have a close relationship with IT.

After some stimulating table sessions with our clients, and a quick fire round of panel Q&A, there were a couple of key takeaways from the morning that really stood out for me. The main one is the continuing difficulty of conveying the value in IFRS 17 projects to stakeholders - something for us all to work on in the months and years to come. There is also the growing realisation on my part that a number of companies really have not started their projects in earnest, or have just performed high level impact assessments. My concern is the level of demand for skilled resources will significantly outstrip supply once projects really kick off. One to watch.

Alex Bertolotti

Alex Bertolotti | Partner
Profile | Email | +44 (0)7525 298694

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