Global markets have become alert to the International Financial Reporting Standard (IFRS 17) – Insurance Contracts since it has become effective as of 01 January 2023 despite the fact that it was issued in 2017 and its application was extended twice to help insurance companies gear up for its application.
IFRS 17 replaces IFRS 4, and to apply it, the recognition and measurement approach for insurance contracts must be identified where the chart of accounts (COA) consequently needs to be redesigned, and hence financial statements will be represented in accordance with the Standard requirements.
What are the requirements for IFRS 17 implementation from insurance contracts management perspective?
The implementation of IFRS 17 mandates companies within the scope of its applicability, from insurance contracts management perspective, to adopt an engine that classifies insurance contracts as per the IFRS 17 requirement, as this task would not be carried out manually given heavy details involved and the need to protect and regularly update this information, and the reliability of the financial outputs derived from the same, as those outputs are extracted and recognized in the financial statements.
What are the requirements for managing insurance contracts pursuant to IFRS 17?
Insurance contracts management requires two components:
- Acquiring an engine for managing insurance contracts pursuant to IFRS 17 requirements.
- An Actuarial Analyst who is capable of understanding the requirements of IFRS 17 implementation and analyzing the current insurance contracts as per these requirements.
What are the choices available for insurance companies in managing insurance contracts as per IFRS 17 requirements?
There are two choices available for insurance companies in managing insurance contracts, namely:
- Purchasing a license of insurance contracts management engine and hiring an Actuarial Analyst who is capable of understanding and applying IFRS 17 requirements.
- Engage managed services that provide the insurance contracts management engine along with providing a specialist to manage the engine, who is a qualified Actuarial Analyst who can implement the IFRS 17 requirements.
What is the engine that Baker Tilly provides for IFRS 17 implementation as Managed Service?
Baker Tilly provides Further Edge platform for IFRS 17 implementation as Managed Service, which meets IFRS 17 requirements, including performing the actuarial calculations and concluding financial results, which will be provided to the Company at the end of each quarter for its accounting bookkeeping and recording process.
What are the significant features of Further Edge?
Further Edge was conceived to resolve the challenges of the insurance sector by providing an integrated, efficient, and agile platform featuring the following:
- Further Edge is a unique full-stack-cloud-based SaaS solution that provides data from not only different sources but also actionable insights;
- Completely web-based, built from the ground up on big-data technology;
- Framework agnostic can run on major vendors (e.g., Amazon Web Services, Microsoft Azure, Google Cloud, local cloud providers, etc.);
- Fully integrated solution with built-in and third-party scripting libraries (e.g., Python and R) that can address a variety of modeling requirements involving historical and predictive analyses;
- Fully expandable via third-party plug-ins to provide complex calculation engines and capabilities, such as compliance, artificial intelligence/machine learning, and others.
What is the added value to insurance companies from engaging in Accounting Consulting for IFRS 17 Implementation?
- Ensure accurate and flawless implementation of IFRS 17 from an actuarial perspective.
- Ensure protecting the financial position of insurance companies and the continuity of their business.
- Increase the stakeholders’ confidence in the company and enhance its reputation.
What are the services provided by Baker Tilly Kuwait?
Providing the IFRS 17 Implementation engine as managed service with qualified actuarial analysts to implement the IFRS 17 requirements.
- Actuarial Technical Reserves
- Actuarial Report on Employee Benefits
- Actuary’s Report on Mergers
- Actuary’s Report on Examining the Financial Position
- Actuary’s Certificate of Authenticity of Insurance Operations for Licensing Purposes
- Actuary’s Certificate of Authenticity of Insurance Operations for Acquisition Purposes
- Actuary’s Certificate for Licensing a Foreign Insurer
- Preparing Actuarial Study on Technical Reserves
- Actuarial Attestation of Financial Position of Insurance Companies