The below provides our latest update on AASB 17 for Australian Life Insurers, and what insurers should be preparing for, as part of our regular Actuarial newsletter ‘Life Insurance Matters’.
Life insurers continue to progress with their AASB 17 implementation at different rates. Notable progress has been made by the large life insurers, in particular the multinationals which are part of their global parent’s implementation programme. These companies are well advanced in their system implementation stage and have commenced the end to end system testing phase of sub-ledger systems and data platforms. By contrast, many smaller life insurers (including friendly societies) are still at the stage of resolving their technical accounting positions, with some recently commencing the model, process and system design stage. We expect smaller insurers will need to accelerate their AASB 17 implementation over the next year in order to meet the deadlines.
Some of the key emerging lessons learned include challenges associated with the development/mapping of expected vs actual cash flows data; allowing sufficient time in the system and parallel run testing phases to flesh out unexpected issues; and the need to start planning for addressing impacts on downstream processes (e.g. analysis of profit, business forecasting etc).