What are the organizational impacts of IFRS Insurance?
Strategy & Governance
IFRS has a dramatic impact across the organization. Deloitte member firms use a four dimensional assessment to describe the impact of financial reporting changes on an insurance business. The dimensions are:
We look at the second dimension - Strategy and Governance and highlight the key impacts
- How IFRS fits with your business strategy – it is universally accepted that the IFRS Insurance implementation would be a major undertaking for all insurers around the world. Positioning it in the context of an insurer’s strategy is very important because its delivery will absorb material resources for at least three years in the insurer’s life and maximizing the benefits from it would appear compelling
- Benefits Realization to your stakeholders and enhanced market perception – A fully compliant organization is a “must have” from the IFRS Insurance implementation. However, it is the insurer that is capable of reaping extra benefits from the implementation that will be able to build and present to the market its new competitive advantages. Early planning is essential to achieve this with desired outcomes and associated benefits identified upfront.
- Catalyst for the enterprise’s strategic change portfolio – An early planning that deliberately links the IFRS Insurance efforts with those from other in-flight initiatives (e.g. Solvency II) offers the opportunity for resource optimization and to lower implementation costs. Building a portfolio of projects and actively govern their interdependencies has proven to be a superior project governance model when overlapping timelines and requirements exist.
- Optimal governance approach during your program and post implementation – The multi-dimensionality of the IFRS Insurance implementation both from an operating model impact and from a stakeholder management perspective suggests a parallel between the governance approach for the implementation program and the approach that would be in place when the new IFRS becomes business as usual.
Question: Is it a Technical Challenge?
Answer: Yes, but not only that. The implementation of a new financial language to measure business performance has pervasive ramifications across the operating model of an insurer