More than meets the eye – Untap the value IFRS 17 delivers for Hong Kong general insurers

IFRS 17 is a major shake-up of insurance reporting on a global scale and for Hong Kong general insurers.

Effective on 1 January 2023, the new accounting standards will bring more transparency and comparability to the way financial information is presented. Investors and stakeholders will get a detailed view of an insurer’s risk exposures and financial performance.

In our video, we outline the key implications of IFRS 17 and share our recommendations on how general insurers in Hong Kong can approach their implementation journey.

More than meets the eye

Key IFRS 17 concerns for general insurers

General insurers have raised a number of concerns around the implications of IFRS 17 to their business and the challenges of implementing this new accounting standard.

Here are some of most commonly raised questions we have heard from you :

Financial outcome

Will IFRS 17 impact general insurer’s financial results?

Q: Will IFRS 17 impact general insurer’s financial results?

A: IFRS 17 redefines a GI company’s revenue, cost and profit recognition. Early assessment is key to understand the scale of impact.

Reporting and disclosure

Will IFRS 17 considerably increase financial reporting & disclosure obligations?

Q: Will IFRS 17 considerably increase financial reporting & disclosure obligations?

A: During the transitional period, IFRS 17 parallel run will add reporting obligations to periodic closing, management and regulatory reporting.

Management KPIs

Will IFRS 17 require different management KPIs?

Q: Will IFRS 17 require different management KPIs?

A: Overnight change is unlikely for GI companies. New KPIs will phase in, underpinned by more granular growth and profitability measures.

Systems and processes

Will IFRS 17 mandate an overhaul of core systems & processes?

Q: Will IFRS 17 mandate an overhaul of core systems & processes?

A: Not necessarily. Medium to small GI companies may adopt cost effective system solution if their portfolio is eligible for the simplified PAA option.

Transformation drivers

Who should drive the IFRS 17 transformation?

Q: Who should drive the IFRS 17 transformation?

A: The initiative requires joint leadership and close collaboration among finance, actuarial and IT functions, steered by company senior management.

How can we help

To effectively untap the value of IFRS 17 for GI companies, we recommend you to consider the following approaches:

Focus the purpose of your IFRS 17 project on serving business needs and providing better management insight;
Leverage fast-track Premium Allocation Approach (PAA) models to rationalise project design and budget;
Adopt standardised, modular IFRS 17 solutions to phase in the implementation and minimise disruption to existing systems.

We have developed an end-to-end, cost-effective platform solution tailored to the general insurance companies in Asia. Our multidisciplinary team can work closely with you and walk you step by step through your IFRS 17 implementation journey.