Once again, the International Accounting Standards Board (IASB) has decided to defer the effective date of the IFRS 17 standard to annual reporting periods beginning on or after 1 January 2023. The Board also decided to extend the exemption currently in place for some insurers regarding the application of IFRS 9 (Financial Instruments) to enable them to implement both IFRS 9 and IFRS 17 at the same time.
This delay follows a decision in November 2018 to delay from the original effective date of January 1, 2021 to January 1, 2022.
This does not come as a surprise given the significant complexities inherent in the standard and the challenges insurers were uncovering as they worked through implementing IFRS 17 within real-world business environments.
What does this mean for Insurers?
Many global IFRS 17 experts and advisors, and of course the insurance companies themselves, welcome the decision as it will give organizations more time to make the significant changes necessary to data, systems, and processes and take a more strategic approach to their projects. This will help drive additional benefits over and above compliance such as additional financial reporting capabilities, a better data foundation for analytics, and increased automation and efficiency.
In over a decade of delivering compliance solutions, we’ve seen that these delays do not slow organizations down. Instead it gives companies some breathing room which de-risks projects and allows businesses to more deeply and thoughtfully embed necessary changes into the normal course of business.
For IFRS 17 in particular, the delay will give insurers more time to engage external stakeholders and allow them to think about making strategic changes to the way the finance and actuarial departments operate.
Aptitude Chief Product Officer, Chris Wade notes, “we have IFRS 17 projects taking place over three continents and we have no expectation that the momentum and pace of progress will slow down with this news. Anyone who is in project is pushing forward – they are taking the chance to look upstream and downstream, to see what can be more efficient and more integrated. We have one client who sees the delay as a chance to look at the robustness of their testing timelines and is using the extra time to understand the implications of the standard more deeply.”
Aptitude Software will continue our planned product development at pace to support our clients as they navigate the challenges of IFRS 17.
Additional IFRS 17 Resources
Interested in more on IFRS 17? Have a look at assets below:
FWD one of the world’s first insurers to enter User Acceptance Testing under IFRS 17
