Setting the IFRS Insurance Implementation Strategy
Key Factors to consider your chosen route
When an insurer decides on its direction and strategy to implement IFRS Insurance there are a number of key factors to consider:
- Where does the implementation strategy position the insurer in relation to its peers?
- What is the insurer’s operational readiness starting point?
- To what extent has the reporting infrastructure just evolved to be compliant and deliver on a day to day basis the minimum requirements? Or
- Is the “as is” infrastructure at the start of the IFRS Insurance implementation journey the result of a structured Target Operating Model approach?
- Is the Solvency II infrastructure “locked down” or does it still offer the opportunity to be adapted to deliver Strategic Synergy Benefits (SSBs)?
The experience of the Deloitte member firms on Solvency II implementation identified three broad routes which is expected to affect insurers’ choice of their implementation route for IFRS Insurance:
- A compliance approach which would broadly limit the change to existing processes and systems to those that are strictly necessary to deliver the new regulatory requirements. The key benefits would be to minimize implementation costs, maximize the use of Solvency II infrastructure and deliver compliance
- A “compliance plus” approach that selectively identifies areas where additional implementation costs are justified to seize business benefits on top of delivering a fully compliant insurance enterprise
- A market leader approach where the business strategy (e.g. finance transformation) absorbs the regulatory driven change to develop the optimal solution that allows the achievement of the desired Target Operating Model