The response to IFRS 17 and LDTI for insurers calls for investments into agile and modernized finance technology that drive better business performance.
While possible to view accounting change as a compliance exercise, nearly all insurance companies are viewing these changes as the trigger for long-overdue deferred investments ranging from targeted data, system or process upgrades to full-scale modernization. Accounting change is also an opportunity for management teams to identify opportunities to transform their operating models, along with the role of finance, risk and actuarial in their businesses.
As for the timeline for making these investments, although the prescribed effective dates have been deferred and many local adoption approaches are still uncertain, there’s no room for delay in working through the significant effort required.
Participation across business units and organizational functions will be essential for adapting to accounting change. Instead of an unstructured approach led either by actuaries, accountants or IT specialists, what’s required is a cross-functional approach based on a business case to modernize operations with flexibly architected insurance solutions that integrate finance, risk and actuarial functions throughout the business.