In order to adopt the International Financial Reporting Standard 17 (IFRS17) by the official target date India’s General Insurance Corporation (GIC Re) has chosen to implement SAP Fioneer’s Financial Products Subledger (FPSL) for Insurance solution offering.
IFRS17 was introduced by the International Accounting Standards Board (IASB) and mandates significant changes in the accounting for insurance contracts.
In order to ensure accurate financial reporting and compliance companies need to implement advanced technological solutions to achieve these changes by the official target date of April 1, 2025.
In India, the Indian Accounting Standard 117 (Ind-AS 117) – developed in coordination with IFRS17 – will be implemented as the local IFRS17 equivalent.
Ind-AS 117 mandates insurers to explicitly declare unbiased estimates of future cash flows, discount rates reflecting the contracts’ cash flows, and adjustments for non-financial risk.
Moreover, revenue will no longer be equal to written premiums but to the change in contract liability.
GIC Re decision of implementing SAP Fioneer’s FPSL is a move that is seen as a reinforcement of that vote of confidence by the Indian Insurance sector.
“GIC Re’s unwavering commitment to transparency, accountability, and compliance with regulatory changes has consistently been our top priority,” stated S K Rath, General Manager at GIC Re.
He continued: “We are confident that SAP Fioneer’s software solution and domain expertise will empower GIC Re to navigate the evolving regulatory landscape effectively, enhancing operational efficiency.”
“GIC Re needed a robust and scalable solution that would enable them to meet the regulators target of April 1, 2025. The Financial Product Subledger (FPSL) is exactly that and we are proud to work with GIC Re to reinforce their position as a leader in the Indian reinsurance market while delivering value to their stakeholders,” adds Dirk Kruse, CEO of SAP Fioneer.
Once GIC Re completes the implementation, it will become the first Indian reinsurer to comply with the new IndAS 117 regulation, the reinsurer stated.
