The overwhelming majority of insurers worldwide are still in the early stages of assessing the impact of IFRS 17, with most struggling to find the talent needed to implement the accounting standard.
A new report from KPMG reveals 85% are still in these early stages, while more than a third have yet to start any projects for IFRS 17 or IFRS 9, which come into effect at the start of 2021 and 2018 respectively.
This is despite most insurers seeing the standards' potential to revolutionise their business through systems modernisation, process optimisation, and actuarial and finance transformation.
"The new standards are complex with broad operational implications, so it is understandable that insurers are taking time to assess the requirements very carefully," KPMG global insurance change leader, Mary Trussell, said.
"But unless companies get started, they could end up challenged to design and implement process and systems changes by 2021."
The research involved surveying 82 executives from companies in 20 countries, including 15 of the 20 largest insurance groups in the Forbes 2016 Global 2000 that use IFRS.
Eight out of ten respondents see securing enough people with the right skills as a significant challenge, with all planning to use external resources such as contractors and consultants as a result.
It was also found that six in ten are finding it difficult to secure the necessary financial budget.
This comes after German insurer Munich Re joined a growing number of companies calling for the postponement of IFRS 17 implementation due to the costs and complexity involved.
"The transition will require extensive training and cultural change to enable staff to understand and report results of the business in what will be a new language," KPMG global head of insurance, Laura Hay, said.
"Insurers' concern with having sufficient skilled resources suggests that late starters face a double challenge.
"They not only have more ground to make up, but also may have a smaller talent pool available to execute the new processes and systems."