Oracle and Chartis Collaborative Research Report on IFRS 17
The heart of IFRS 17 compliance: Why data and data architecture are vital in addressing insurers’ technology challenges
Fragmented technology implementations of IFRS 17 compliance
Implementations of IFRS 17 compliance have been fragmented. Fragmentation is partly an effect of and response to the diversity of systems insurers have, and the componentized nature of compliance.
In the case of globally distributed organizations, an IFRS 17 program will often be specific to particular jurisdictions. A single business may use multiple technology vendors for implementation. Fragmentation does not just occur in different compliance segments, it is also governed by regional practices and preferences. Although insurers have had to identify gaps in their technology architectures, they do not necessarily want to ‘change what they know’. Overhauling systems when regional operations are accustomed to existing systems and providers is not always straightforward or desirable. For vendors and insurers alike, existing architectures will heavily influence the nature of future ones.
There will also be some degree of consolidation for globally distributed organizations. Parent organizations will influence smaller or less strategically vital satellite operations. Organizations that operate in a prominent and large market are more likely to retain an independent implementation program, based on their existing technology or their specific market needs.
The trend toward fragmented implementations emphasizes that there is no exact blueprint or IFRS 17 compliance. Insurers and vendors alike must assess their particular situation and develop a custom-built approach for IFRS 17 compliance.
Key findings
- As the IFRS 17 implementation date draws closer, the biggest shift for insurers will be in the key elements of their technology architectures.
- Insurers’ IFRS 17 implementations are highly fragmented, especially among large insurers with multiple regional operations.
- The highly fragmented nature of implementations means that compliance requires a custom approach.
- Institutions implementing new IFRS 17 systems or modernizing their legacy platforms must pay attention to the flexibility of data management and the scalability of computation.
- Effective data management for IFRS 17 compliance can be achieved with two concurrent approaches which are vital for long-term success. 1. Operationally: the enhanced coordination of risk and finance. 2. Technologically: flexibility, versatility and scalability, fostered at the design stage.
- Versatility in particular is vital when firms are confronted with diverse database types. Versatility supports adaptability, helping insurers achieve better system and platform integration.
The insurers’ response to IFRS 17/LDTI long-term success
Don’t delay meeting IFRS 17/LDTI compliance. Stay up to date with the latest regional trends in insurance standards and learn more about a solution that can accelerate your IFRS17/LDTI program.
Transformative Finance Exchange: IFRS 17 Edition
“While IFRS 17/LDTI entails many process and rule changes, it is clear that the biggest shift for insurers will be in the elements of technology architectures. Long-term success requires a heterogeneous, flexible and scalable data-management framework.”
—Sid Dash, Research Director, Chartis