Unless IFRS17 is managed carefully from the beginning, businesses risk overloading their teams and spending money in areas where it is not needed.
That is according to a new white paper from financial services company FIS, which argues this mistake was made by some firms when the Solvency II directive came into force last year.
To learn from this, it is essential that businesses put the right team together from the outset, and as cost-effectively as possible, according to the paper.
"If Solvency II teaches anything, it is that leadership and project management are key to managing your resources in times of regulatory change," it says.
"Unless IFRS17 is managed carefully, it will be all too easy to follow the same pattern of sending 'all hands to the pump', mistaking spending money for making progress."
IFRS17 is also likely to result in demand for IT and actuarial resources outstripping supply, further pushing up the costs for firms that are unprepared, the paper says.
This is thought to be even more pressing for those with disconnected finance and risk management functions, with the accounting directive likely to result in a complete "financial transformation" for them.
To mitigate these risks, the paper recommends insurers look to the expertise of technology providers in order to reduce costs and free up teams to focus on the finer details of the regulation.
In addition, it urges firms to bring ageing software up to date, ensuring they are embedded across their organisation and controlled centrally by a qualified IT team.
"In many regions, however - and particularly those yet to experience Solvency II or equivalent levels of regulation - this requires a complete change of mindset," it adds.
Although there is a prevailing mood of doom and gloom about IFRS17, the paper suggests seven benefits the regulation will bring to the industry:
Liabilities valued at market value
Truer reflection of profits
Nearly global consistency
Collaboration between actuaries and accountants
Better governance of actuarial systems
Greater protection for policyholders
Investor confidence.
"With a solid, seamlessly connected foundation of systems and processes, firms will be in a stronger position to not only ease the pressure of IFRS17, but also reap long-term business benefits," the paper concludes.
