IFRS17 Implementation for a Insurance CompanyBFSI
IFRS17 is an International Financial Reporting Standard, which was issued by the International Accounting Standards Board in May 2017. IFRS 17 will replace IFRS 4 on accounting for insurance contracts and is effective from 1 January 2023.
Insurance companies in Indonesia need to comply with the IFRS17 guidelines very soon. While a significant number of insurance companies have already embarked upon their IFRS17 compliance journey, a lot of small to midsized insurance companies are still finalizing their compliance approach. A major question that insurers are looking to get the answers to is whether IFRS17 guidelines can be quickly and economically implemented altogether without compromising the standards in the industry.
The client is one of the largest Malaysian Insurance company. The client intends to implement the IFRS17 solution effectively to meet the regulator compliance requirements for monthly reporting purpose. The client has 5 million contracts (~ 15000 ICGs) at the contract level and wanted a flexible solution to serve their Global offices with different guidelines.
Challenges:
- Processing over 1.8 billion rows of cashflow data leads to long run times
- Error occurrence due to uneven utilization of the hardware resource
- Mapping more than 45 cashflow legs from the client that need to be considered in IFRS17
- The regulator requirement hasn’t been finalized yet, with a possibility of changes in future
Team Implemented the solution using the following approach:
- Splitting all the inputs and outputs into multiple parts to lighten the burden on the process.
- Creating a parent and sub-process for all instances and do parallel run to maximize the usage of the resource and reduce the run time
- Developed a customized solution to answer all the business needs of the client.
- Utilizing the agile method by splitting the requirements into sprints
Implemented solution allows the client to implement IFRS17 without any compromise on the Industry Standard.
Key benefits:
- Run Time Reduction
Total run time reduced from more than 4 days to 6 hours.
- Optimized resources Utilization
Resources utilization averaging 80% – 90% for improved process.
- Tailored Solution for Comprehensive Compliance
Highly customized solution fulfills not only the IFRS17 compliance requirements but also the other business needs of the client.