Should you pause your IFRS 17 transition projects given the deadline extension?

The Finance Controller of a mid-sized insurance company in Malaysia was in a dilemma. For the past several months, his team had meticulously studied the IFRS 17 regulatory requirements, measured the scope of work, completed the impact assessment of their existing application, analysed the various products and solutions, and were in the process of identifying the right implementation partner to affect a smooth transition. The first steps were already in place. The pandemic, however, put everyone’s best-laid plans to waste.  

Today, the Finance Controller and his team were busy responding to the disruption caused by the pandemic. All departments were asked to reexamine their short, medium, and strategic projects and continue with only those that were an absolute must. Given the fact that the authorities had pushed the deadline for IFRS 17 compliance by a year, a couple of team members suggested that they put the implementation on the back burner and utilise all resources—talent, infrastructure, and capital—to respond to the present crisis. The Finance Controller was tempted—should he postpone? 

Myth: A deadline extension means project implementation can be postponed  

Fact: While a deadline extension does give a sense of relief, it is advisable to not let the momentum lag. IFRS17 solution is not just about putting a CSM engine in place. You need to have the right GL Chart of Accounts, the right ledger strategy, and a conducive ecosystem to bring your actuarial and accounting information together. This ensures consistency of data being reported across IFRS disclosures, management information packs, and regulatory submissions.  

While companies do need to make available additional capacities to function in the ‘new normal’ environment, they should not get their eyes off their strategic goals, which is to have the right set of solutions for managing end-to-end actuarial and finance accounting processes. Further, the IFRS17 regulation also requires you to have a parallel run to get comfortable with reporting across multiple GAAPS and to fine-tune your processes.  

A pause and restart can put a complex project back by several months and can also crank up project costs closer to the deadline.  

The Fusion Practices Recommendation  

Insurers should continue on the mapped path for the IFRS 17 transition and use the additional time window to ensure better and hassle-free integration. IFRS 17 envisages one solution for all insurers and has increased the complexity and granularity in reporting to improve transparency. 

Our suggestion is to look at end-to-end actuarial and finance accounting processes, identify areas of opportunities, and put in the right systems in place to support automation and efficiencies. Our expertise in Oracle Cloud and Azure can help you automate your processes and create a common reporting platform across accounting and actuarial. We can also help you choose the right tools and technologies to support your transition to IFRS17. The areas covered by us are data sourcing, actuarial and risk calculations, accounting rule engine, business planning, General Ledger, consolidating actuarial and accounting figures, and reporting. 

The extended deadline provides the opportunity for insurance businesses to thoroughly analyse the software solutions available and choose the one that offers them end-to-end integration—Oracle Cloud ERP and EPM not only offer seamless transition to achieve compliance, but also will help your business to be agile and future-ready. 

Feel free to connect with Fusion Practices on https://fusionpractices.com/contact . We operate in UK, USA, Middle East, APAC and India. We have been working with several of our clients sharing our knowledge and experience in finance and actuarial transformations, using Oracle Cloud and Azure Data platforms.

To know how you can leverage the first-mover advantage and be a technology-adoption leader in your industry, register for an Oracle webinar on Thursday, 04 June 2020.