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Have you started your IFRS 17 journey?

If not, it’s time to begin!

Over four years ago, the International Accounting Standards Board (IASB) published the new insurance accounting standard, IFRS 17. In less than two and a half years, insurers with December year-ends are expected to release their first set of IFRS 17 compliant financial statements, if not as early as June 2023 where interim reporting is required. If your IFRS 17 compliance journey has not started, now is the moment to act.

Failure to implement the Standard on time will lead to your financial statements being non-compliant with IFRS. This in turn will result in non-compliance with the Companies Act and Insurance Act, with wider potential consequences of being deregistered or having your insurance licence revoked.

Our experience of success factors

To meet the requirements of IFRS 17 is a significant project that will impact the entire business across various teams and should not be taken lightly. Aspects of IFRS 17 look similar to the current IFRS 4 accounting standard, so it is easy to underestimate the differences and the complexity that the new standard brings to the end-to-end reporting process. There are numerous areas of judgement required that could have material unexpected flow-on implications on the reported numbers if not carefully considered.


The introduction of IFRS 17 will be a driving force in changing the operating model for financial reporting in insurance companies. In the implementation projects already underway, we have seen increased collaboration between the actuaries, accountants and IT/data teams, and we expect this to continue upon transitioning to IFRS 17 reporting.

This increased collaboration has been due to the nature of the new standard, where a much higher level of granularity requires re-assessing data availability and problem solving through collaborative teams to remap to the new requirements. For example, premium debtors which have previously been a high-level accounting adjustment will now need to be reflected within the liabilities, which are typically in the actuarial realm.

With greater alignment between the teams, there is an opportunity to re-think and revolutionise the reporting process and the future operating model. However, all of this takes time.

As we all know “the devil is in the detail” and IFRS 17 is a prime example of this. The standard is principles-based rather than prescriptive, and it also requires accounting policy choices in some areas, so detailed analysis is required to fully understand the impact of any interpretation and choices made.

Data, IT architecture and operating models

The impact on data requirements, IT architecture and operating model is largely drive by the IFRS 17 measurement model that entities are required, or in some cases, elected to adopt. For example, the Premium Allocation Approach (PAA) measurement model appears to be the simpler model to implement. Regardless of the measurement model that is applied insurers can expect increased demands on these components. To address this, we recommend following a structured Target Operating Model (TOM) approach in implementing the Standard. This approach will ensure that insurers are adequately planning, managing and de-risking their IFRS 17 implementation programmes. The TOM design must ensure that for every change to the operating model and end-to-end reporting process, operational and financial reporting risks are appropriately identified, and adequate controls are designed and implemented to address these risks.

End to end data flow picture

The need for a holistic approach to the end-to-end reporting process requires greater collaboration not only between the actuaries and accountants, but also the system architects and data specialists. The success of IFRS 17 projects and the value added (beyond compliance and keeping your insurance license!) largely hinges on data transformation which provides an opportunity for better reporting to inform the business. However, this is only if sufficient time is available to design a solution to meet the strategic needs of the business, rather than just being a compliance activity.
It is imperative that insurers start their projects as early as possible to allow enough time to not only understand the implications of the transition to IFRS 17 on their business, but also to focus on building an innovative and streamlined solution to meet their IFRS 17 needs. Many insurers, including some in South Africa, have made significant progress in their journeys. Industry interpretation is starting to align, software solutions are available, and there is no advantage in waiting for further industry progress as any IFRS 17 solution will need to be customised to your business.

Constant iteration and agility

We have seen first-hand that upon building an IFRS 17 solution, unexpected results are unearthed, driving some re-design of the initial plan. These moments can either be rushed with temporary fixes or solved with time and proper planning, implementing a best practice long-term solution.
Connect with our cross-functional team to hear how we can help you to meet the requirements of IFRS 17 with practical, holistic solutions for your business.