Derived from significant collaboration between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) the new standards for insurance contracts will improve the comparability of financial reporting among insurers globally.
In June 2013, the Boards published exposure drafts (EDs) on accounting for insurance contracts, and while much of the feedback received through previous outreach activities had been addressed there are still a number of understandable concerns being voiced within the comment letters.
In 2014, we believe the focus needs to shift from debating the “perfect solution” to addressing practical considerations and dealing with unintended consequences. Insurers and other entities issuing insurance contracts should begin to understand the potential impacts on accounting and reporting, systems, talent and on the business. Bringing these elements together in a coordinated approach will be critical to ensure efficiencies are gained.