General Insurance Article - The future of IFRS 17 in 2021

IFRS 17, while not yet in effect, has been in development for nearly a decade and its implementation continues to result in a number of challenges for the sector, says UK Leader of Insurance and Global Lead for IFRS 17 at PwC UK, Alex Bertolotti. Insurers need to interpret the Standard and define their accounting positions.

 They also need to contend with developing and enhancing actuarial models, while implementing new technologies, systems and software.

 During 2021 we expect insurers to continue on their implementation journey and as they face what may be another challenging year, here are the three things firms need to consider:

 The transition to IFRS 17 reporting is expected to be a complex exercise. Firms should get used to dealing with system implementation phases and work closely with vendors, perform user-acceptance and system integration testing as well as parallel runs.

 A number of KPIs will need to be redefined in order to make sense of an IFRS 17 world.

 It’s crucial that firms think about this now, especially in light of the fact that most insurers have yet to determine their KPIs. In some areas, new KPIs are likely to be required altogether.

 Finally, as IFRS17 approaches, we know that insurers are also having to simultaneously deal with other regulatory, environment and business related changes. Planning for successful implementation with a limited bandwidth of resources across multiple regulatory, environment and business challenges will continue to be key. Keep hold of your best people, as they will become increasingly valuable as the deadline approaches.

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