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Can you see clearly now? Feedback from analysts on the insurance reporting landscape

Can you see clearly now?

Exploration of analysts’ current views on insurance accounting and their expectation on how things will change under IFRS 17.

Analysts’ views on how insurance accounting may change under IFRS 17.

Will you be ready to tell analysts your IFRS 17 story?

Getting ready for IFRS 17 is a huge implementation and systems challenge for insurers, and will remain so even with one additional year before implementation.

However, quite apart from the implementation challenge, another crucial aspect is communicating the likely effects to the analyst and investor community so they are prepared and understand what they see.

To throw more light on this, we have carried out research amongst a representative sample of 20 analysts to gauge their views on current insurance accounting to understand their expectations of how things will change under IFRS 17.

Key findings and calls to action

We found that analysts are dissatisfied with current IFRS and see some significant likely benefits under IFRS 17. But they also have a number of uncertainties and potential concerns:

  • IFRS 17 will affect how analysts value insurance companies but, just as now, they will not focus exclusively on IFRS in the future.
  •  Analysts are divided on key questions such as whether IFRS 17 will make insurance companies more attractive for investment and reduce the cost of capital.
  • Despite significant improvements in comparability under IFRS 17, analysts still see a place for alternative performance measures - many are still expecting Solvency II and embedded value reporting to be just as important to them as IFRS financial statements.
  • Analysts are not yet familiar with IFRS 17. They want to hear more from companies about the impact of IFRS 17 and what they are doing to prepare for it.
  • More communication, discussion and awareness raising is needed to ensure the new standard launches smoothly to create a more cohesive, better-informed market.

Has your organization begun to plan a program of outreach and education for analysts and investors? Have you identified what their key areas of questioning and interest will be?

If you are an analyst or investor, how do your views and preoccupations over insurance accounting compare to those of your peers?

Download the report to learn valuable insights to help you to formulate your thinking.

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