Insurers across the globe have called for a single accounting framework to enable increased transparency and more effective company comparisons.
A survey of insurance finance executives conducted by business advisory firm Deloitte found that nearly half (47%) want harmonisation of the two main accounting regimes. This would mean a convergence of International Financial Reporting Standards (IFRS) with US Generally Accepted Accounting Principles (US GAAP).
Francesco Nagari, Deloitte's global IFRS insurance leader, said that a single set of accounting standards would provide consistency in terms of company reporting.
He added: 'The new rules will level the playing field for investors who would be able to compare insurers globally and with other companies in different sectors. Today's insurance reporting is fragmented and creates a barrier for general investors to consider insurance shares.'
Accounting convergence is hampered, however, by the fact that a complete set of IFRS rules for insurance liabilities does not yet exist, while reform of US GAAP has been awaited for some time.
Proposals to rewrite the accounting standards used by insurers for liabilities and investments are being finalised jointly by the International Accounting Standards Board and the US Financial Accounting Standards Board. But they have struggled to reach an agreement and the timetable has slipped.
More than half the survey respondents rated the uncertainty around the timeframe for implementation as their biggest concern. Specifically, 51% were worried by delays over IFRS 4 (Phase II) for insurance contracts and 52% highlighted issues over the timing of IFRS 9 for financial instruments.
Many insurers (56%) said they would wait until the standards were finalised before starting projects to implement the new rules.
'The extended uncertainty surrounding the completion of a converged insurance project has hampered insurers' desire to prepare for this major implementation challenge,' Mr Nagari said.