4th March 2020

Just weeks after concluding on the amendments to IFRS17, on March 17th the IASB board voted to delay the effective date to January 1st, 2023. This brings deliberation over proposed changes to the standard to a close.

The news will be welcomed by many and was not completely unexpected. Six months ago, a group of European insurers implored the IASB to reconsider the target date. These insurers were experiencing challenges around the level of aggregation, transition and presentation.


The further delay to IFRS17 will cause teams to re-evaluate the status of their projects. More time is clearly useful, but it is worth considering that availability of skilled resources and budget constraints is unlikely to change.

It also does not change the economics, so a rapid and effective approach to deliver IFRS17 remains essential. Firms should use this extra time to improve data issues, fully test their solution and be on top of their transition plan.

On March 26th, Legerity ran a webinar taking a technical look at the Premium Allocation Approach to IFRS17. During the webinar, we asked an audience of 200 insurance industry experts whether the delay has had any effect on their projects.

A small percentage (15%) are seeing a significant effect on their IFRS17 projects now the standard has been pushed back a further year. These firms have decided the project timelines will change, and in the weeks since the delay announcement, Legerity has seen re-planning and implementations pushed back.

The largest group (44%) responded yes, their projects will be affected, but not by much and will carry on in-flight. This is great to see. These projects may see some internal realignment, but no major changes. Legerity encourages firms to use this additional time to consider how to derive the most business value from these complex change programs.

Some firms are seeing no effect at all (15%). These insurers will have made great headway with their implementations and are marching on despite the extra year.

Becoming IFRS17 complaint is just one of many challenges facing the market, and it is understandable that just over a quarter (27%) are not sure of any possible impacts. Certain firms are still in the impact assessment and vendor selection phase, and while the additional time may alleviate some strain, they are still behind many of their peers.

 


 

Legerity can help insurers achieve their IFRS17 goals, from a minimum compliance approach to full finance transformation.

Available on the Cloud and pre-configured for IFRS17, Legerity FastPost can help insurers accelerate their programs.

Contact Legerity today to discuss your program with our IFRS17 experts.