All insurers are likely to be impacted, whether they are transitioning to IFRS for the first time, moving to a new IFRS insurance standard or potentially adopting a revised US GAAP insurance model. These changes can be a catalyst to improve your finance function, systems and investor communications. However, to integrate these necessary changes in a strategic and measured way, companies need to start planning now to begin the transition to Phase II.
The technology implications of the new standards are likely to be complex and costly, as Gary Reader, Global Insurance Advisory Sector Leader explains: “Many insurers don’t have the system capabilities to capture all of the information that may be required under Phase II. There will also be significant demands on skilled actuarial and finance resources and companies may have to hire additional resources, outsource to third parties and train and redeploy skilled resources.”
Insurance companies are also all too aware of the need to educate analysts and shareholders, who may require a lengthy period of familiarization, to help them understand how and why the accounting and presentation changes will affect reported results.