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Insurance Insights - January 2018

Insurance Insights - January 2018

A collection of KPMG's latest publications and articles which focus on developments in, and issues facing the insurance industry.


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Getting ready for the new accounting standards

New standards - Tell the right story in your IFRS disclosures

“Now that the new standards on revenue recognition and financial instruments are finally effective, corporates and financial institutions alike are gearing up to make their first disclosures.

These pre-implementation disclosures are your opportunity to tell the story of the change: the estimated effects on revenue, profit or loss, equity, the key calculations and assumptions you are making, the expected impact going forward.”

Our latest blog post comes from Dick Korf, who provides technical accounting advice to financial institutions and corporates in the Netherlands and globally on the application on IFRSs 9 and 15.


Transition toolkits

Practical guidance to help you navigate and make a smooth transition to the new standards.

Feedback from leading insurers on IFRS 17 and IFRS 9

Wondering how you compare to your peers on the journey to IFRS 17 and 9 implementation?

With the publication of IFRS 17, insurers are now embarking on a journey to implement and operationalize the new standard alongside IFRS 9. And the one question we hear most often from the many insurers we work with is, ‘how does my progress compare with my peers?’

To help answer this question and find out how well-prepared insurance companies are, we surveyed more than 80 insurance executives around the world to benchmark their readiness for IFRS 17 and IFRS 9 and examine how they are navigating change on the frontline.


Key findings

  • 85 percent of respondents are still assessing the impact of the new standard or have not yet begun their assessment.
  • Most of them are targeting readiness on or before 2021 to allow for dry-running of new processes; only 5 percent plan for implementation after 2021 due to extended local transposition processes.
  • Almost eight out of ten execs foresee difficulties in securing sufficient skilled people for implementation.
  • Over half of execs do not yet know whether they will buy or build a Contractual Service Margin (CSM) calculator – one of the key decisions in designing their target systems architecture.
  • Two-thirds of companies are keen to seize the opportunity to transform their business. Top opportunities include: systems modernization, process optimisation, actuarial transformation and finance transformation.

The road to implementation is not easy, and the risks of delay are significant in terms of a shrinking talent pool, a more limited runway for systems integration and foregoing the opportunity to be strategic in operationalising the new standards to achieve greater efficiency. Much needs to be achieved in 3 years. KPMG professionals are here to help.

US tax reforms – Impacts for IFRS reporters

Changes in US tax legislation enacted at the end of last year could significantly affect the 2017 financial statements of any company with operations in the US. The changes are numerous and complex and may impact a company’s income tax line this year end.

Given that IFRS requires companies to use currently enacted tax laws and rates in their 2017 financial statements, time is of the essence to understand these complex changes and to estimate their impact. To help those reporting under IFRS to understand the changes in the limited time now available, we’ve produced Tax reform in the United States (PDF, 377KB).

EIOPA Update

In December, EIOPA issued a number of opinions, guidelines, analysis and Q&As, including the following:

Central Bank of Ireland Update

The Central Bank of Ireland published the following papers in December:

Insurance Distribution Directive Update

Following a request from the European Parliament and from a number of Member States to defer the implementation of the Insurance Distribution Directive (“IDD”), on 20 December 2017 the European Commission issued a Proposal to defer to 1 October 2018 the date of application of IDD, rather than 23 February 2018.

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