IFRS 17 represents the most significant change to insurance accounting requirements in over 20 years — it demands a complete overhaul of insurers’ financial statements. This major change program to implement IFRS 17 will extend beyond the finance and actuarial functions of insurers —its impacts will need to be communicated to a broad range of internal and external stakeholders.
IFRS 17 will require organizations to ensure data governance, lineage and transparency across the entire reporting chain. This includes a wide spectrum of data that will be used, from historic or current data (e.g. policy and premium data or data to produce the risk adjustment) to forward-looking data (e.g. data used to produce cash flow projections).
To start, insurers should work with internal and external stakeholders to assess the current data flows and identify potential gaps. In doing so, it is critical to have the future state in mind to identify data requirements across the existing data and systems landscape.
In addition to data flow and system analysis, it is important to review your data management capabilities at the enterprise level. This includes the end-to-end data architecture and flow (e.g. source, master and reference data once for multiple uses), data governance process and policies (e.g. access controls and ownership), and the Target Operating Model (e.g. chief data office and interaction model) to “manage data as an asset”. This will help you to define target-state data architecture to meet IFRS 17 Standard and company’s strategic direction in data management.