The Deloitte Insurance Business Platform Accelerator – enabled by SAP

The announcement of the new Financial Reporting Standard, IFRS 17, has forced the insurance industry to go through years of profound transformation. The new standard made it evident that many insurers needed to modernise fast and had to invest significantly.

In the effort to become compliant, implementing the right technology was a major driver of cost and complexity – and delays. To meet the deadlines and still allow for better long-term decisions, tactical solutions had to be built for aspects like group reporting or planning – often poorly integrated in the overall Finance landscape and optimised for the single GAAP IFRS 17 only. Also, if implementation of IFRS 17 didn’t go smoothly, insurers were forced into simplifications and workarounds. Many insurers, especially larger ones, soon focused on a Minimum Viable Product.

In consequence, the industry lost sight of its future vision for Finance – or, at least, achieving it was no longer its priority, until 2023 when IFRS 17 became applicable in most jurisdictions. And that is where we are now. Modernisation has begun but some operational gaps remain, and massive investments have been made, though often just for compliance reasons and without bringing much benefit to the business, yet.

In these difficult circumstances many insurers are not eager to make further financial transformation efforts anytime soon. They want their previous and upcoming investments to pay off , in reduced costs, increased simplicity and efficiency, and greater transparency. Going forward, this will involve a lot of automation for which they may not have the ideal architecture and process landscape.

Insurers’ tactical solutions in Finance may now become strategic solutions, but ideally in a fully integrated way, together with end-to-end optimisation like Data Quality assurance from source systems through to group consolidation. Centralised Business Steering, including Planning & Forecasting and ‘What-if’ simulation across local GAAPs, economic frameworks and IFRS 17, may now become a priority, but the industry isn’t there yet. There is neither the internal political will nor the budget now to make bold moves and experiments. Smaller steps have to prove their immediate value for the insurer, towards their future Multi-GAAP Finance value chain.