Successful implementations of the incoming accounting standard IFRS 17 have taken a three-step approach, with rushed projects resulting in suboptimal results and increased effort.
That is according to FIS' head of insurance risk solutions management and strategy, Martin Sarjeant, who said large-scale projects have followed a typical pattern.
Successful firms have first focused on building models, before then working on data and finally optimising processes, with thorough preparation "always" paying off.
Sarjeant also revealed that South Korean insurers are leading the race to compliance, largely because these companies are also planning for the capital standard K-ICS.
"Firms there had to transform their operations radically," Sarjeant continued. "Also, IFRS 17 will significantly affect Korean balance sheets, leading many to change the types of contracts they sell."
But it is not just Korean insurers that are ahead of the pack. Companies that have met the requirements of the EU's Solvency II or similar capital standards are also finding it easier.
Most of these firms have made "significant improvements" to their actuarial and finance processes and systems, although many are only now starting IFRS 17 implementations.
This might not necessarily be a bad thing though, according to Sarjeant, who said that a lot has been learned about the complexity of the standard in recent years.
"A better consensus has been formed about the trickier parts, products are stronger, and solutions exist to help speed up implementation and minimise costs," he added.
Despite insurers understanding more about IFRS 17, The International Accounting Standards Board last year voted to delay the implementation deadline to 1 January 2022.
Sarjeant said the decision had bought clarity to the industry after months of rumors.
"While some had expected or hoped for a longer delay of two years, it is clear that most are now using the time wisely," he continued.
"Globally, we've seen insurers step up their implementation effort now the deadline is no longer in question."
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