IFRS 9 & IFRS 17
Insurers need to rethink key parts of their operations
"Major Renovation" implies time
IFRS 17 took time to emerge. First talks began in 1997 and the final version of the norm was publicized in 2017. Initially scheduled for the 1st January 2021, application of the norm has been delayed to 2023 to provide more implementation time for insurance companies. According to analysts, it will represent the most significant change to insurance accounting requirements for the last 20 years.
IFRS 9 is applicable from the 1st January 2018 but insurers are allowed to implement IFRS 9 and IFRS 17 jointly to avoid pitfalls if implemented separately: temporary increase in accounting mismatches, high costs and efforts to prepare the financial statements at different times.
Harmonization and Simplification of accounting model
IFRS 17 establishes new requirements to evaluate insurance contracts based on current estimates so that stakeholders all over the world can appreciate and compare the financial holdings and performance of companies that issue insurance contracts in any country.
IFRS 9 provides a new model for classification and measurement of financial instruments, new requirements about changes in the fair value of the entity’s liabilities induced by the entity’s own credit risk. The norm also offers a better alignment between risk management and accounting through a principle-based hedge accounting model.
Business Impacts, Financial Reporting Transparency
& Operational Complexity
This new norm will have big repercussions for an insurer in terms of financial modeling, data, processes and systems. These repercussions will have profound impacts on all aspects of their organizations, from front-to-back office, reinforcing the trend towards closer links between the finance and risk functions.
So that, companies will need to rethink key parts of their operations:
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organisation and resources
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process and model
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information system
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internal and external communication
More information in Livre blanc : de l’IFRS 9 à l’IFRS 17
Solution...
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TESTIMONIALS
“Belfius Insurance a su profiter de l'expérience partagée par le passé avec AMINDIS lors de l'implémentation de la norme IAS39 afin de répliquer une grande majorité des mécanismes utiles pour la normes d'IFRS9. L'ajout de certains éléments dans la signalétiques des titres et dans la signalétiques des transactions a permis de mettre en place les différentes règles de comptabilisations ainsi que les différents contrôles permettant de garantir des chiffres de qualités. Nous avons pu continuer de produire des chiffres sur l'ancienne norme (IAS39) tout en préparant la nouvelle norme (IFRS9). Ceci a grandement facilité la transition. Le succès de ce projet a été permis grâce à l'outil performant et l'excellente collaboration avec les collaborateurs d'AMINDIS.
Depuis 2019, nous avons un autre défi à relever: IFRS17. En effet, alors qu'IFRS9 concerne l'actif, IFRS17 se concentre plus sur les résultats techniques avec un traitement comptable complètement différent. Cette norme nous oblige encore une fois à repenser les rubriques comptables utilisées pour certains de nos actifs. L'outil IN-DIS nous donne de la flexiilité dans notre travail car nous savons que nous pouvons facilement reclasser nos actifs (lorsque ceci est autorisé) et ajouter des ledger en cas de comparaison des chiffres pendant un certain laps de temps.
Christophe Dedriche / BELFIUS / Business Project Leader & Senior Business Analyst