With upcoming IFRS 17, insurance companies will need to adhere to the new standard which is making significant changes to financial reporting. Designed to increase transparency and comparability, IFRS 17 will affect any company that is involved in writing insurance contracts.
WHAT IS IFRS 17?
Effective from January 2023, IFRS 17 replaces IFRS 4, explaining to businesses how they should account for insurance contracts, whilst providing comparability between insurance companies.
IFRS 17 looks to provide insurance companies and investors with a more detailed approach to insurance accounting but requires a more uniformed approach and consistent presentation for all insurance contracts.
BENEFITS OF CLOUD TECHNOLOGY FOR IFRS 17
Integration between Finance and Actuarial Systems
The integration between Actuarial and Finance Systems is a key aspect of IFRS and highlights a problem for many organisations. With the requirement to deliver more granular data, this is only possible through the exchange of data between Actuarial and Finance Systems. For example, actuarial calculations will need to highlight both actual and expected cash flows.
With this, teams will need to work closely to get a precise view of both actual and retrospective data. Adopting a Cloud Technology system makes compliance simple, with features allowing for aligned and integrated operations across the whole business.
IFRS 17 will have the biggest effect on Finance, IT and Actuarial Departments, but with Cloud Systems, integrating between the three has never been easier. With this collaborative effort between teams, more valuable data can be extracted, and more specific finance reports can be made, benefitting business with quick processes and accurate reporting.
Consolidation of Multi-Entities
Early planning for IFRS 17 would be recommended for all businesses, but for international, multi-entity and multi-currency businesses, this is a requirement. Not only will these businesses need to consider the different start dates for IFRS 17 across the globe, but they will also need access to all data to reflect accurate calculations.
Now is a perfect time for multi-entity businesses to adopt an accounting system which consolidates data into a more manageable view. To comply with the IFRS 17 standard, insurers will need to provide data from across the whole business to produce accurate financial reports. With cloud accounting solutions, compliance is easy, with automation calculating revenue recognition postings quicker and directing seamlessly to general ledger software.
Reduce Dependency on Manual Spreadsheets
The introduction of IFRS 17 will see a complete turnaround of how insurers present financial statements due to the shift in accounting requirements. Put an end to manual processes and spreadsheets by implementing cloud-systems which consolidate data in a single management view.
Modernise financial reporting with cloud technology which enables quick reporting with automation, provides valuable insights, and allows finance teams to close processes sooner.
HOW CAN ION HELP?
As cloud-technology specialists, ION work with world-leading solutions to provide businesses with systems which align business operations and put an end to time exhaustive and error prone data management. Cloud accounting systems are built with compliance in mind and implementing cloud technology into your accounting system means that you no longer need to stress about complying to updated accounting standards.
ION only work with the best solution providers and our team of experts aid businesses throughout their cloud accounting journey, from consultation to implementation. We pride ourselves on our unique positioning in the financial services world, being one of the only organisations who not only implement cloud technology but train your existing staff on the new systems.
Ensure Compliance to IFRS 17 and any new accounting standard by introducing cloud technology into your accounting system. Contact ION to discuss Cloud Technology and IFRS 17 today.