By Jason Contant | April 29, 2021<\/p>\n
As the transition date for the new insurance accounting standard IFRS 17 approaches in January 2022, insurers are split on whether or not to use dedicated staff for implementation.<\/p>\n
A recent study of about 25 insurance clients of PwC found that 56% will take on IFRS (international financial reporting standards) implementation as an additional responsibility to their ongoing work, with the remaining 42% saying they will use dedicated staff for implementation.<\/p>\n
\u201cWe found that cross-functional teams that are dedicated is really helpful, so it\u2019s interesting that we had that stat earlier that a lot are not planning to use dedicated staff,\u201d Kyle Snyder, a partner at PwC and chair of Insurance Bureau of Canada\u2019s IFRS working group, said Tuesday during a web conference. \u201cYou might not have needed dedicated staff in the past, [but] it will be a bit hard this year to have blackout periods \u2014 [business as usual] financial reporting periods. So something to maybe reconsider if that was your plan before.\u201d<\/p>\n
Snyder was part of a panel of speakers discussing IFRS 17 during IBC\u2019s 24th annual Financial Affairs Symposium. Snyder discussed the implementation of the standard and provided some tips for success during the session IFRS 17: Industry\u2019s Implementation Progress and Insights<\/em>.<\/p>\n IFRS 17 \u2014 representing an effort to harmonize international accounting standards so there is a common global standard of financial statements and terms \u2014 is set to come into effect Jan. 1, 2023, following a transition period to begin next January. \u201cWhen it comes to operational considerations \u2026 not everybody is embarking strictly on a compliance basis,\u201d Snyder reported during the webinar. \u201cSome are using this as a catalyst \u2026 to transform and modernize their finance function and streamline processes.\u201d<\/p>\n According to PwC\u2019s study, conducted in December 2020, over 95% of insurers believe that the majority of their business (75-100%) will be eligible to apply the simplified premium allocation approach (PAA). Although this is good news, Snyder said, there is still work required to test PAA eligibility for groups of contracts that are not automatically eligible (i.e. contracts with greater than one-year term), including the use of appropriate materiality thresholds. The survey also found over 90% of insurers plan to use a data warehouse as a primary data repository for IFRS 17, and 63% are planning on conducting three or more test runs of the standard.<\/p>\n With less than a year left until the IFRS 17 transition period, Snyder offered the following tips for success:<\/p>\n This helps businesses to think about the skills needed to make the transition successful. IFRS 17 has broader impacts than purely accounting \u2014 it can impact dividend decisions, capital and solvency.<\/p>\n For example, is your internal reporting calendar flexible, and by how much? \u201cIf you have a 10-day close and that is non-negotiable, then that is something that would be important to have as a grounding decision as you start to design your process and flows and other elements of this implementation,\u201d Snyder said. It will also help identify what can be moved ahead of the year-end date.<\/p>\n \u201cSo is this an actuarial role, a finance role?\u201d Snyder asked. \u201cDo you need expertise in this area? Maybe this is an element where you can upskill some awareness of, say, an actuary with some financial reporting background or vice versa, to bake that into your project plan.\u201d<\/p>\n \u201c[The light\u2019s] only red when you slam into that wall,\u201d Snyder said. \u201cOften, we find that project status doesn\u2019t really change until you know you\u2019re not going to make it. Using that caution flag is effective because it will help you get more buy-in, maybe alert you to where simplifications may be needed or get additional resources if needed, or maybe just get the attention of some of those senior members to move forward on some of these decisions that need to get going.\u201d<\/p>\n This helps break implementation into smaller, more manageable pieces. Not only does it make the project easier to manage, but it also helps flesh out any fatal flaws that should be baked into future sprints. \u201cBut I think the real benefit is it gives you more timely feedback on how hard it was,\u201d Snyder said. \u201cHow long did this sprint take you? You were estimating it would take you four weeks, maybe it took six or seven. What does that mean for your remaining sprints and your project plan?\u201d<\/p>\n When you miss a sprint, the key is to roll it into the next sprint, Snyder said. \u201cYou don\u2019t start the next sprint, obviously, until you complete the first one.\u201d This will allow your team to realize that, for example, it\u2019s not possible to get three sprints done in 13 to 16 weeks, \u201cwhich then influences your project team on when you might need to take a different course of action.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" By Jason Contant | April 29, 2021 As the transition date for the new insurance accounting standard IFRS 17 approaches in January 2022, insurers are split on whether or not to use dedicated staff for implementation.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"off","neve_meta_content_width":70,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,13,20,3],"tags":[],"class_list":["post-812","post","type-post","status-publish","format-standard","hentry","category-global","category-ifrs17","category-ifrs17-online","category-news"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts\/812","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/comments?post=812"}],"version-history":[{"count":4,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts\/812\/revisions"}],"predecessor-version":[{"id":816,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts\/812\/revisions\/816"}],"wp:attachment":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/media?parent=812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/categories?post=812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/tags?post=812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Have project managers clearly identify stakeholders<\/strong><\/h4>\n
Have some guiding principles around prioritization<\/strong><\/h4>\n
Don\u2019t forget about the people<\/strong><\/h4>\n
Don\u2019t drive like a tailgater<\/strong><\/h4>\n
Use a \u2018sprint-based structure\u2019<\/strong><\/h4>\n