Data management will be critical to effective and successful IFRS 17 implementation.
Applying the forthcoming insurance contracts standard will create a new set of data items to be maintained, such as the contractual service margin (CSM), and the risk adjustment (RA). This will typically require significant change and investment in systems and processes. As well, finance and actuarial teams will need to work more closely together.
Making the data available in a reliable and controlled way, and at the appropriate level of detail, will be essential for quality reporting.
It will be important for insurers to fully understand and determine the financial information that will be presented and disclosed in their published financial statements before designing and developing systems and processes to meet the new reporting requirements.
Obtaining the data needed to calculate the CSM and any interest recognized in other comprehensive income (OCI) at transition, on a retrospective basis, is likely to prove a greater challenge.