EY Cyprus organized the “IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments: Challenges and the dawn of a new world for insurance reporting” breakfast event, on Monday, 11 December 2017, at The Leventis Municipal Museum. Key speaker was Kevin Griffith, EY’s Global Insurance IFRS Lead Partner, who presented the key concepts of the new accounting standards and discussed implementation challenges for insurers.
More than 50 executives and members of the senior management of insurance companies and regulators attended the event and were given valuable information regarding the new IFRS standards, which aim to improve the comparability and transparency of accounting practices, especially through enhanced disclosure of valuation, performance and risk information and the adoption of principles-based accounting frameworks.
Savvas Pentaris, Partner and Head of Financial Services at EY Cyprus, says:
“IFRS 17 represents the biggest accounting change for insurers in many years. It’s the dawn of a new era. After some 20 years of discussion the new standard will give users of financial information a whole new perspective on insurers’ financial statements. It is expected to bring greater comparability and transparency about the profitability of insurers and give users more insights into an insurer’s financial health. The impact will vary significantly from company to company, depending on previous accounting policies and practices. But we are certain to see many and various impacts on the reported numbers.”
The implementation of these accounting changes will require significant effort by insurance companies, in particular to design new valuation and reporting systems and gather data to meet the significant disclosure requirements. This major adjustment project extends beyond the finance and actuarial functions of insurers, hence its business impacts need to be understood and communicated to a wide range of internal and external stakeholders.
Christina Agathangelou, Head of Financial Accounting Advisory Services at EY Cyprus, says:
“Preparing for and implementing the new standard will present challenges. It will require substantial effort, and new or upgraded systems, processes and controls. It is therefore paramount for insurance companies to gain an understanding of the requirements, evaluate the implications and plan for timely for implementation.”