Just one in ten insurers with less than $1bn (£770m) in premiums worldwide have started the design or implementation phase for incoming accounting standard IFRS 17.
That is according to a new report from KPMG, which reveals that almost two-thirds of larger insurers have already started these preparations, although many challenges remain.
A whopping nine in ten of insurers both large and small believe they will find it difficult to obtain the skills needed, while half are worried they will not secure the necessary budget.
KPMG International's global insurance change leader, Mary Trussell, said firms are realising how difficult implementing the new standard will be the more they step up preparations.
"Ironically, we are finding the organisations that are furthest along with their projects are feeling the greatest time pressure," she continued.
"There is a huge amount to be done and no insurer can afford to slacken the pace of their implementation efforts. Smaller insurers urgently need to engage and get started."
The report shows that nearly half of large insurers already have teams of 50 or more to carry out this work, while a similar percent of mid-size firms have up to 25 people assigned.
It was also found that most companies have only given training to their implementation teams, even though IFRS 17 is set to impact many different areas of firms' operations.
Despite the challenges ahead, virtually all of the largest insurers studied believe the new IFRS standard will be an opportunity to transform their business models.
Key areas identified as potential areas of improvement include process optimisation, actuarial process enhancement, and system modernisation.
"The costs of implementing IFRS 17 are very significant, but the opportunities presented can be even greater," said Laura Hay, KPMG International's global head of insurance.
"The standard enables insurers to take a fresh look at their strategies and processes. The transition can be a catalyst for innovation, talent and emerging business leaders."