January 9, 2018 by Kristen Cornell, Principal, Industry Value Engineering, SAP Canada
To forward-thinking Canadian property and casualty insurers, IFRS 17—a new standard to ensure consistent insurance contract accounting—represents a long-awaited catalyst for digital transformation.
Addressing IFRS 17 in a strategic manner can lay a long-term foundation for more efficient finance and actuarial processes, higher quality data, and the ability to conduct profitability analysis at more granular levels, ultimately supporting insight-driven business decisions.
In addition to meeting regulatory compliance, an opportunity-oriented approach could help insurers reduce manual labour, increase efficiency across finance, and improve the employee experience by reducing mundane work.
All this makes the new standard a big moment for the Canadian P&C insurance industry, and the way insurers respond will indicate how they intend to operate in the digital future.
Background: What is the IFRS 17 standard?
Twenty years in the making, the International Accounting Standards Board’s (IASB) IFRS 17 standard is intended to replace IFRS 4 and overhaul accounting in insurance contracts. The new standard, which takes effect Jan. 1, 2021, is designed to ensure consistent insurance contract accounting and comparability with non-insurance products globally.
“IFRS 17 replaces the current myriad accounting approaches with a single approach that will provide investors and others with comparable and updated information,” said IASB Chairman Hans Hoogervorst.
IFRS 17 applies to any business that issues insurance contracts, reinsurance contracts and investment contracts with discretionary participation features, provided insurance contracts are also issued. The scope of the standard not only affects primary insurers, but also banks, reinsurers, and any business offering insurance products.
Read the full article in the Digital Edition of the December 2017 Canadian Underwriter.
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