Yesterday, I had the pleasure of leading a panel discussion at the InsuranceERM IFRS 17 Event in London. Finance leaders from global insurers Aviva, Assicurazioni Generali SpA, Allianz, and Gjensidige Forsikring ASA joined me on the conference stage to discuss how firms are proceeding in light of the standard delay and how they are coping with the timeline and uncertainty. Our conversation covered many topics, but I’ve summarised the top 3 takeaways below:
1. The recent one-year delay is taking the implementation of IFRS 17 from ‘unrealistic’ to ‘possible.’
With the delay, organisations are in no way feeling like they can or should stop their projects. Rather, it will give important breathing room which almost all the companies indicated could be spent on testing, refining and understanding the changes and volatility expected as a result of IFRS 17. As an early mover on IFRS 17, Remo Cavegn, Finance Program Director at Allianz, mentioned that the delay would give Allianz the chance to run parallel sets of reports in 2020 and 2021 to further understand and be able to articulate the change in KPIs. Massimo Tosoni, Head of Group Accounting Policy and Reporting at Assicurazioni Generali SpA, reiterated the importance of leaving time for your planning and control teams to fully understand the new process and have the chance to see the impacts on planning figures well ahead of the effective date. The extra year will allow for this type of stakeholder engagement and education.
2. There are still gaps in guidance from the IASB on certain topics.
All participants agreed that while the gaps were around very specific topics, those areas still had the potential to affect results and reporting. In addition, there are still guidance gaps around how auditors will interpret the standard. Remo Cavegn, Allianz, cautioned not to lose site of the big picture by getting bogged down in the questions relating to specific details but to stay focused on the impact on results. Because of the flexibility in judgment and approach allowed by IFRS 17, insurers may not have to implement every detail if it won’t affect their results.
3. Despite the pain, there are benefits beyond compliance.
Panelists cited increased standardisation and harmonisation across the organisation - including a consistent COA, additional data granularity for future digital finance initiatives, the ability to reduce legacy systems and the potential for a more end to end view of finance. Jo Clube, Group Technical Accounting Director, Aviva plc observed that IFRS 17 is a once in a life time opportunity so it’s critical that Aviva get it right and emerge with the ability to present reliable, consumable reporting to the market.
In summary, the deadline extension will likely result in IFRS 17 projects which are more thoughtfully approached, rigorously tested and have the opportunity to deliver additional value to the organization. However, the timeline is still relatively tight, and Insurers are still seeking to clarify certain aspects of the standard.
It was a pleasure engaging with our panelists. Should you want to discuss the session or our IFRS 17 perspectives and expertise in more detail you can reach out to me at any time.
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