Participants at our first IFRS 17 Virtual Roundtable named data management processes, data granularity, Proof of Concepts and project management as chief considerations in compliance projects.
On July 8, 2020, Systemorph AG conducted its first virtual roundtable for IFRS 17. Carriers, partners, advisory companies and software providers held a lively discussion about challenges, experiences and learnings from an implementation perspective.
The top discussion points were:
- Data and Processes
- Group versus Business Unit views
- Value of a Proof of Concept
- Overall Project Management
Data and Processes
The most prominent discussion point was around the various insurance data management and process challenges arising from IFRS 17.
The necessary granularity level for IFRS 17 data management is hard to achieve on a group level for an insurance alone. It becomes even more complicated considering the different data naming conventions by business unit or country. Generating a trusted, consolidated view to build your balance sheet is thus a major challenge for all IFRS 17 implementations.
Another point raised was the need to consolidate the efforts of the existing IFRS 9 solution and the to-be-built IFRS 17 approach into a common workstream. Many participants believed that this could be the first step to establish a common platform for actuary and financial accounting data.
This becomes even more relevant since IFRS 17 compliance tends to blend tasks among actuaries and controllers.
Group versus Business Unit Views
The roundtable participants agreed that a most challenging aspect of IFRS 17 is how it relates to the art of communication in a company.
While it is obvious that members of an IFRS 17 project team must cooperate and work in alignment, the interworking with members outside of the core project team is more important than in other projects.
IFRS 17 requirements mean compliance is both an actuary and an accounting-related project. The outcome of the IFRS 17 project not only influences the risk management of a company, but it also directly influences the balance sheet – the core domain of the CFO. Because of that dual nature of the project, the best advice is to communicate frequently, regularly and consistently within the company.
Participants also discussed the fact that the compliance methodologies and processes that every BU must follow must be defined by core functions. Otherwise projects will fail.
Value of a Proof of Concept
The value of a Proof of Concept (POC) for IFRS 17 compliance was confirmed by all participants. It was clearly stated that the carriers should switch from test data to real live data as soon as possible to validate their assumptions and methodologies.
Otherwise they might be very surprised when they are producing their first “real balance sheet.” You must adapt your methods and methodologies to find the optimal result for your company, which is only possible with real data.
Another topic raised in this discussion was the evaluation of your preferred vendor for a compliance project. Finding the right partner or software to support you with your IFRS 17 implementation is not easy. Many vendors and solutions are available to help and picking the right partner for your business requirements without a POC is almost impossible.
Overall Project Management
Simply said – put the best person you have on this journey. It is a complicated and tedious journey, so you want the best of your company to navigate you through the shoals of the sea. And let them work full time on this project. IFRS 17 is not something you can do as second priority or part-time job. Creating and implementing a successful IFRS project plan will require your full attention and persistence.
There are of course many more aspects to IFRS 17 compliance beyond these four topics discussed at our first roundtable. We will hold additional roundtables about IFRS 17 compliance soon. If you would like to be part of next roundtable or if you want to know more about successful IFRS 17 implementations and how we can help with your, simply contact us.