The implementation of IFRS® 17 is a complex project for any insurer. One of the key project activities is the design and implementation of a Contractual Service Margin (CSM) tool. This is an entirely new concept and there is no established precedent for CSM in financial reporting.
KPMG's latest global IFRS 17 benchmarking survey of nearly 200 insurers around the world found that as yet there is no dominant solution for the CSM tool. Just over half of insurers have decided to buy a tool from an external provider, while nearly a quarter have decided to build their own. The remaining firms have not yet made a decision.
But whatever solution is chosen, the CSM tool will need to be tested to ensure it is working as expected and providing accurate and reliable information that complies with the principles of the standard. This will be needed as part of the project implementation controls and to satisfy the external auditors.
KPMG has built a unique testing application that can help. Download our brochure to read more about our IFRS 17 testing application.