Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • News

IFRS 17 forecast to cost insurers up to $24bn

Open-access content Tuesday 21st June 2022
IFRS 17 costs forecast to reach up to $24bn

The global insurance industry is forecast to spend up to $24bn (£19.6bn) implementing the new IFRS 17 accounting standard, which is significantly more than was projected a year ago.

The forecast comes from Willis Towers Watson (WTW), which surveyed 270 insurers from 45 countries, finding that there is still a huge amount of work to successfully deliver IFRS 17 ahead of the 2023 deadline.

Only 40% of the 26 large multinationals polled, and 20% of the other 244 companies, expect to deliver fully prepared programmes on time.

The findings also show that data, systems and processes are the top current concerns emerging from dry runs, requiring some of the greatest investment.

Furthermore, most firms expect a substantial increase in people required to run valuation processes under IFRS 17, with many turning to significant transformation and harmonisation across all metrics, including the use of automation, to address this.

Due to the higher-than-expected workload, WTW estimates that it will cost the global insurance industry $18bn-24bn to implement IFRS 17, which is significantly higher than the $15bn-$20bn it forecast a year ago.

Global IFRS 17 advisory leader, Kamran Foroughi, said: “The next 12 months are critical for the industry to deliver IFRS 17 programmes on time. 

“The survey results lay bare the true scale of the challenge that inevitably means pushing more work post the 'go live' date in order to maximise delivery confidence for the programme.”

Overall, the research suggests that more than 10,000 people will be required to deliver IFRS 17 over the next two to three years, which is forecast to be a challenge for insurers’ staff recruitment and retention.

And while 14 of the 26 large multinationals surveyed are planning a 2022 investor update on IFRS 17, most other firms are not. 

Similarly, while some companies are required by local statute to publish IFRS 17 accounts for the first quarter of 2023, and a few larger insurers intend to voluntarily, most companies are not planning to do so.

This comes after the UK Endorsement Board (UKEB) last month approved the adoption of IFRS 17 for use by UK companies, despite concerns remaining in areas such as reinsurance, coverage units and interim financial reporting.  

The Association of British Insurers' (ABI) head of prudential regulation, David Otudeko, urged the UKEB to now focus on ensuring the UK’s voice is heard in resolving outstanding issues. 

“This includes the current live issue relating to the quantification of benefits provided under an annuity contract, which is a material issue for UK annuity providers and was the subject of a recent IFRS interpretations committee tentative agenda decision,” he continued.

“We urge the UKEB as part of its remit for international influencing to engage with the IASB to secure a positive outcome for UK annuity providers.”

 

Image credit: iStock

Author: Chris Seekings

Filed in:
News
Topics:
Regulation Standards
Global

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ