Navigating the new world: Preparing for insurance accounting change
Preparing for insurance accounting change
IFRS insurance contracts standard will have far reaching impacts for life and P&C insurers and reinsurers.
While many insurance executives and industry commentators find it hard to believe, the International Accounting Standards Board’s (IASB) forthcoming Insurance Contracts standard is expected to come to fruition in early 2017. This will enable comparison of the financial performance of insurance companies across the world based on a consistent standard for the measurement of their insurance contract assets and liabilities, income and expense. Once the standard is issued, organizations will face a new challenge: turning it into reality. It won’t be an easy task as the changes it will bring about will affect their entire enterprise – finance, actuarial, data, systems and processes, business functions and a wide range of skills.
At KPMG we recognize that many insurers will want to wait until they have sight of a final standard before analyzing what it means for their business: equally, many insurers will want to start thinking now about how they will go about this exercise and start securing budgets and resources. The complexity of the standard and the impacts on the business will need to be well understood, thoughtfully planned for, and navigated with agility to ensure the end goal is delivered securely and return on project expenditure maximized.
This is a multi-disciplinary exercise that requires a range of skills, including accounting, actuarial, data analysis and rigorous project management. The first priority is delivering these changes timely, safely and efficiently in a way that maintains and builds confidence on the part of customers, investors and regulators. As a leading provider of accounting, tax and actuarial advisory support, KPMG’s global network of insurance professionals are well equipped to help you navigate an epic journey.
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