Recent amendments to IFRS 17 have given a complete picture of what the final accounting standard will look like and should be a wake-up call for insurers.
That is the warning from KPMG, which said that the amendments would ease the efforts of insurers implementing IFRS 17 and reinvigorate those experiencing project fatigue.
The changes reflect the economic realities of insurance contracts that also provide investment services, and recognise the impact of reinsuring loss-making business.
Some companies will avoid considerable challenges around reanalysing data, modifying IT systems, and accounting for commissions paid to win insurance business.
Moreover, KPMG said that the proposed one-year delay to the implementation date would give insurers much needed time to complete their IFRS 17 projects.
"But implementing IFRS 17 is still a complex and significant undertaking requiring substantial effort," KPMG global lead for insurance accounting change, Mary Trussell, said.
"The amendments are a wake-up call to assess progress and reinvigorate implementation. For those that have yet to make meaningful progress, consider it the starting gun for a marathon."
The International Accounting Standards Board (IASB) published its proposed amendments last month after growing pressure from the insurance industry.
Although most companies were required to begin accounting for their financial assets and liabilities under IFRS 9 in 2018, insurers meeting certain criteria were granted a temporary exemption.
This would have expired on 1 January 2021, but the IASB has also proposed to extend that exemption to 1 January 2022, in line with the new proposed effective date of IFRS 17.
When it becomes effective, IFRS 17 will replace IFRS 4 Insurance Contracts - a standard that has allowed insurers to continue using legacy local insurance accounting practices.
Trussell said this represents the biggest accounting change for most insurers' working lives, and that actuarial, IT, investor relations and human resources departments will be impacted.
"It's time for many insurers to step up the pace of their implementation efforts so they can reach the finish line with systems and processes tested and results understood by management and investors," she added.