February 27, 2019 by David Gambrill
SSQ Insurance has partnered with analytics firm SAS to help further their efforts towards IFRS 17 compliance.
The new International Financial Reporting Standard (IFRS 17) standardizes reporting requirements for financial firms internationally, with the intent to improve financial transparency. But industry efforts to achieve compliance with IFRS 17 has resulted in increased complexity and operating costs.
The International Accounting Standards Board voted in November 2018 to propose a one-year deferral of the effective date for IFRS 17 to 2022.
In addition, the board proposed extending to 2022 the temporary exemption for insurers to apply the financial instruments Standard IFRS 9, so that both IFRS 9 and IFRS 17 can be applied at the same time. IFRS 9 looks at reporting of financial instruments, establishing standards reporting items such as long-term loans, equity investments, or any non-vanilla financial assets, as PwC notes in a position paper.
Through its partnership with SAS, SSQ Insurance intends to address IFRS 17 requirements. In addition, the Quebec-based insurer will deliver additional benefits beyond compliance such as improved processes and automation to support their financial systems.
“This collaboration is part of a set of guidelines established to ensure the successful implementation of IFRS 17 at SSQ Insurance,” said Patrick Cyr, senior vice president of finance at SSQ Insurance. “The expertise and mobilization of our internal resources combined with the know-how of SAS will allow our company to comply with the standard within the set deadline while optimizing the functionalities of this new solution and the additional information now available.”
The partnership comes at a time when the Canadian property and casualty are working hard towards compliance with IFRS 17. Some have openly questioned whether the P&C insurance contracts are a good fit with the IFRS standard – and whether the benefit of clearer financial reporting is worth the cost of transforming the insurer’s operations.
“We recognize the level of complexity IFRS 17 brings to the insurance industry,” said Cameron Dow, president of SAS Canada. “We are very committed to supporting the industry with our leadership in risk transformation solutions, equipped to tackle the regulatory burdens of current and future reporting requirements.”
SSQ Insurance’s announcement is an example of one insurer jump-starting its preparations for the changes.
“IFRS 17 is the biggest reporting change for the industry in 20 years, and the implications for an insurer’s financial operating model cannot be underestimated,” said Darryl Ivan, national executive of risk for SAS Canada. “The SAS platform ensures that all parties – actuaries, risk managers and accounting specialists – can collaborate seamlessly and establish maximum transparency to ensure compliance while enabling the business. We are delighted to support SSQ Insurance in their IFRS 17 compliance needs.”