IFRS 17 implementation – challenges and solutions for international insurance groups

IFRS 17 implementation – challenges and solutions for international insurance groups

By Ulrich Gröbel, Director, Head of Insurance Europe, IFB

Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I am looking back on more than 20 years of management experience within the financial services Industry – both working as a line manager within international Insurance groups and as project/engagement lead within International consulting firms including BIG 4.

After a period of European driven deregulation we see a constant increase of regulatory requirements in recent years such as Solvency II and IFRS currently. Together with challenges through a disrupted value chain by digitalization, Insurance industry is facing a new perspective on how to evaluate attractiveness of business segments, markets and lines of business, that will deeply Impact the steering of national and international Insurance groups. In addition the value driver change within this environment.

What, for you, are the benefits of attending a conference like the IFRS 17 Forum and what can attendees expect to learn from your session?

Since the Insurance industry is facing new challenges, an open discussion amongst market participants on the one hand and financial advisors on the other hand helps understanding the nature and materiality of challenges and shows options for possible solutions – a brief dialogue amongst experts for a better understanding of markets we are operating in.

In your opinion, what sort of constraints will IFRS 17 bring?

IFRS 17 will change the perception on Insurance business from a traditional history-oriented view to a market value and future oriented approach. Constraints can be found in poor data quality, lack of data governance, silo-oriented approaches to actuarial and accounting valuations instead of cross functional orientation of processes and business/system architecture. It will partially need a fundamental change in managing data flow, valuation processes and analytics.

What are the core aspects international insurance groups need to focus on to ensure successful implementation?

IFRS 17 conversion affects almost the entire system landscape of Insurance business units – which often is historically grown and barely integrated. In addition it requires close collaboration of various group functions and interaction with local subsidiaries. To make projects successful it helps to take the opportunity of regulatory changes to align target operating model, target architecture and target system landscape to future oriented objectives. Also we have learned within the financial services Industry, that the next regulatory requirements are already on their way, so future oriented solutions need to be established and generate competitive advantages.

What are some best practice methods for managing complexity within multi divisional, international organisations?

Only cross functional, segment-oriented project approaches help overcome the challenges. A clear project scope – based on mid and long term strategic ambitions lay the foundation for necessary architectural decisions that need to be taken at early stage. ifb’s end-2-end approach from functional requirements through architectural design (based on our REFRAMETMmethodology) to agile implementations helps to manage complexity in challenging international project environments.

How do you see the impact of IFRS 17 evolving over the next 6-12 months?

Since the valuation of business sees a magnificent change we will see intense internal discussion within companies, how to best adopt IFRS principles in regard to company specific business portfolios. Projects starting will need to assess the best way to gain speed on a large transformation project while assessing the impact on financial statement and business in parallel.

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