The clock is ticking on International Financial Reporting Standard IFRS 17

26 April 2022
Knowledge Base

The clock is ticking on International Financial Reporting Standard 17 (IFRS 17), the January 1, 2023, compliance deadline drawing ever closer. For insurers around the globe struggling with self-development or “empty box” software solutions, there is a new path forward: KPMG IFRS 17 Express – powered by SAS®. The IFRS 17 solution blends KPMG’s deep IFRS experience, SAS’ best-of-breed analytics and an IFRS 17 methodology globally tested by Allianz, one of the world’s leading insurance groups with customers in more than 70 countries.

“There’s no need to reinvent the wheel or duplicate effort,” said Christian Knoller, IFRS 17 Project Lead at Allianz. “Insurers can take confidence in leveraging a predefined IFRS 17 methodology and technology that encompasses the expertise of three market leaders and industry-leading practices.”

Built on the existing SAS Solution for IFRS 17, KPMG IFRS 17 Express is intended to deliver a cost-effective approach that can greatly reduce IFRS 17’s computational burdens with pre-configured options for automation and integration. Designed to foster collaboration among actuaries, risk managers and finance teams, the solution provides:

* Fully functional IFRS 17 contractual service margin calculation and posting engine, inclusive of past, current and future reporting periods.
* Predefined data models and wide-ranging postings built to manage a broad range of insurance and reinsurance products available worldwide.
* A structured workflow process within a single, integrated platform, ensuring traceability, auditability, and transparency.

“While the IASB amendments to IFRS 17 were intended to ease implementations, the pandemic challenged compliance efforts, and many insurers aren’t where they want, or need, to be,” said Mary Trussell, Insurance Accounting Change Lead, KPMG International. “Through our combined financial and risk management experience, SAS’ award-winning IFRS 17 technology, and a methodology tested by Allianz, insurers can leapfrog delays and capability gaps and accelerate their IFRS 17 compliance journeys.”

What is IFRS 17?

International financial reporting standards set common standards for the preparation of financial statements, making public companies more comparable globally. Billed as the first truly global accounting standard for insurance contracts, IFRS 17 will replace the current standard, IFRS 4, and increase financial transparency. While most affected countries are required to comply with the new standard by January 1, 2023, some countries, including several in Asia, will be afforded more time to prepare.

Whatever the compliance deadline, IFRS 17 will change how insurers calculate insurance liabilities and report profit or loss, compelling them to report with greater transparency how insurance and reinsurance contracts affect finances and risk. For most insurers, compliance with IFRS 17 will require significant investment in new or upgraded technology – but KPMG IFRS 17 Express – powered by SAS gives them an efficient and cost-effective alternative that is every bit as thorough and robust as a customized solution.

“IFRS 17 brings material changes to the way insurance companies calculate, manage and report on their financial exposures and risks. These changes require the right operating models, methodology, and technology to be successful,” said Troy Haines, Senior Vice President of Risk Research and Quantitative Solutions at SAS. “Bringing together knowledge and practical real-world IFRS 17 experience from SAS, KPMG, and Allianz gives insurers of all sizes exactly what they need: a fast lane to IFRS 17 compliance and a clear avenue for future growth.”

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