A global group of nine insurance associations has written a joint letter to Hans Hoogervorst, chair of the International Accounting Standards Board (IASB), underlining concerns surrounding the International Financial Reporting Standard (IFRS) 17’s impact on insurance contracts.
The joint letter states that extensive testing, together with insurers’ detailed implementation planning, confirms that a number of important issues still need to be resolved in order to ensure the quality and operational practicability of the new standard.
There is also industry-wide agreement that a delay of two years is needed, both to allow for the necessary improvements to be made to the standard and for adequate time for companies to tackle the significant implementation challenges that IFRS 17 presents.
Although IFRS 17 does not come into force until January 2021, a majority of UK re/insurers have already begun to prepare for the changes, with a survey by analytics firm SAS reporting in May that 19% classed it as a top strategic priority.
This latest announcement follows claims by Guy Carpenter this year that IFRS 17 is set to increase the complexity and cost of operating, as companies will be required to report in greater depth how decisions affect their financial position.
