To prepare for the forthcoming Insurance Contracts standard and IFRS 9, insurers should consider a broad range of impacts that go beyond the accounting and actuarial functions and hit at the heart of the business.
For the best outcomes, insurance companies will want to assess the impacts of the IASB Insurance Contracts standard and IFRS 9 from a number of perspectives. Our methodology can act as your compass, helping you navigate the change from five interdependent angles. Taking this approach, insurance companies will have far greater success in fully understanding the broader business implications, and therefore, be better prepared to tackle them.
Below are a few questions that insurers should be asking now:
KPMG’s approach helps organizations develop a rapid understanding of the key areas of significant judgment and decisions required, and where it may be sensible to wait and assess how peers are responding.
The key questions that insurers should ask include:
There is a real benefit in agile work among small multi-disciplinary teams collaborating, experimenting and building prototypes to test and scale. Making strategic and tactical decisions about the potential impact on information systems will help insurers manage development resources and budgets wisely.
Among the key questions that insurers should ask are:
The requirements of the new standard(s) are expected to affect the pattern of profits earned on certain products, the volatility of profits, losses or other comprehensive income, as well as capital and the funds available for shareholder and policyholder dividends.
Greater granularity of disclosures will prompt the need for both mandatory disclosures and supplementary communications with analysts and investors to help them understand how and why the accounting and presentational changes will affect reported results.
Among the key questions that insurers must ask:
The forthcoming changes will raise the need for experienced actuarial and finance professionals as well as data scientists, IT architects and process specialists and touch many areas of the business.
The transition will require the prioritization of dedicated resources and focus on internal and external education. By considering a company’s long-term objectives, the changes could be used as a catalyst for greater mobility, cost saving measures and efficiency improvements.
Among the questions that insurers should ask:
A well developed and “living” plan, including realistic time-scales and clear accountabilities, forms an effective blueprint for success. Establishing a core team, ideally ring-fenced to focus exclusively on the project, is critical to success, with a steering committee to ensure good governance.
Whether a centrally-driven model or a more devolved model is chosen, all program elements will need a high degree of collaboration across geographic and functional lines.
To learn more about how KPMG can help you prepare for the forthcoming insurance contracts standard, please contact your local KPMG member firm today.
IFRS insurance contracts standard will have far reaching impacts for life and P&C insurers and reinsurers.