The insurance industry faces new challenges from new GAAP accounting rule ASU 2018-12 for long-duration contracts. Industry earnings will become more volatile based on changing estimates of future mortality rates and other economic factors. Equity levels may take a hit at transition as well. As the new rule is more than just an accounting change, insurance companies will have to implement changes across functions, including actuarial, finance, financial planning and analysis, investor relations and IT.
EY Americas FSO Finance Performance and Risk Leader, EY Americas FSO Insurance and Actuarial Advisory Services Leader