IFRS 17 is an International Financial Reporting Standard. It replaces IFRS 4 on accounting for insurance contracts and has an effective date of January 1, 2023. IFRS 17 Insurance Contracts is a complete overhaul of accounting for insurance contracts, with new requirements for data and processes that impact teams across the organization, including actuarial, accounting, and IT. The IFRS 17 insurance accounting standard establishes the principles for the recognition, measurement, presentation, and disclosure of insurance contracts.
Learn why data management is essential for long-standing, effective compliance with the new IFRS 17 and LDTI standards in this research report from Oracle Financial Services and Chartis Research.
There are four main areas to consider when approaching IFRS 17 implementation, including the reassessment and regrouping of existing insurance contracts, data management, actuarial modelling, and accounting integration and allocations.
There are three proposed methods for reassessment, including general measurement, the premium allocation approach, and the variable fee approach. Insurers must review their portfolio to ensure they choose the right approach.
IFRS 17 implementation poses major data challenges, requiring additional and more-granular data. Historical data must be captured and aggregated, and the granularity of data and its sources must be identified, resulting in the need for increased data storage.
Projected cash flows and risk adjustments from actuarial models are key inputs for IFRS 17 compliance. Due to the regrouping nature of IFRS 17, insurance accounting cash flows may need to be updated.
IFRS 17 accounting integration and allocations require considerable changes to reporting and disclosures that are driven by data and modelling inputs. Source systems need to be integrated with actuarial modelling and the accounting ledger and must include control audit, and reconciliation.
To ensure IFRS 17 compliance, insurers must plan a clear strategy and governance structure that includes objectives, preparation, and rollout.
Oracle offers an end-to-end modern accounting and reporting IFRS 17 solution that empowers insurers with extensive data-centric business insights to drive profitability. Gain a proven framework for data ingestion from source systems, portfolio setup with business rules, disaggregation of contracts into groups, and subledger accounting for future-proof success.
Oracle makes IFRS 17 implementation less complex for insurers. Coordination across actuarial, risk, finance, IT, and business functions requires experienced input from each area along with input from technical architects, product experts, and engagement managers. Oracle’s methodology is proven for IFRS 17 compliance and includes guidance on knowledge transition and inbuilt approaches for agile delivery in large programs.