As someone who has delivered systems changes in finance and actuarial teams for insurance clients for over two decades, I have mixed feeling following the firming up of the IFRS 17 rules and deadlines.

Here is another opportunity for insurers to modernise their infrastructure; connect up legacy reporting processes; and create harmony between accountants and actuaries ... but on the other hand, here is also an opportunity for insurers to simply add more stuff into their complex finance systems landscape.

The question I ask myself is this – have we really learned the lessons of having doing this (many times) before – and as recently as Solvency II?

Understanding IFRS17 – to become key members of the top team, technologists (and change professionals) need to understand what IFRS17 is … and what it isn’t.

This can be quite hard as IT often sits at the ‘end of the chain’ for what, ultimately, is simply a new accounting standard. This, as it has many times before, encourages IT functions to follow when they really need to lead.

They need to lead for three important reasons:

  1. They will contribute disproportionately to the cost
  2. They will contribute disproportionately to the risk
  3. They are the systems integration experts – connecting things together is their skillset

This last point is key because IFRS 17 is not a ‘point solution’ where there will be a set of simple business requirements that feed a design-build-test delivery model. Instead the regulatory changes creates the potential for change across a large number of components and functions. Systems, Data and data professionals need to be heavily involved in deciding how to respond – the spectrum of cost and risk is very large.

In fact, I see IFRS 17 as more of a ‘data integration’ challenge than anything else – yes, there might be the need for new software etc. but most of the data and functional capability already sit in Finance – it just needs to be plumbed differently.

I would also at this point choose to make myself unpopular with some of my IT friends and say that “Finance is a bit different” – two main reasons - 1) ‘shadow IT’ is typically stronger and more mature than in other functions and 2) it’s all about the numbers – ‘testing’ is often less important than ‘reconciliation’ in delivering a positive business outcome.

So this brings me to my four top take-aways:

  1. Don’t design or build anything until you know the goal. The solutions will be wildly different if the objective is minimum compliance vs transformation. Organisations that are open and honest about what they are really trying to achieve will be more successful and spend their money more efficiently. It is all too common to see a senior exec expectation for minimum compliance sitting atop a programme that is trying to deliver transformation – and typically failing as it won’t have the resources or commitment to succeed.
  2. IFRS 17 is not a ‘point solution’ and buy vs build assessments will be needed for a number of sub components – these can include: actuarial models; accounting rules/sub-ledger; data integration; and reporting & MI. The drivers for decisions in each of these cases will be different and will also be highly dependent on the as-is landscape of the particular organisation. Regardless of what some people might tell you this means that there is not a ‘one size fits all’ solution for IFRS 17.
  3. Focus on the numbers! This is a Finance requirement and not an iPhone app - technologists tend to focus on functional and, sometimes if they’re good, non-functional requirements … here we need to understand and work to ‘financial requirements’. This requires a good working knowledge of the financial dynamics of the business and drives a different set of priorities to manage.
  4. To safely deliver beneficial change, IFRS 17 needs a multi-disciplinary team – silos of capability will create more issues than other programmes due to the particularly pervasive nature of the change. Most Finance programmes, that aren’t full blown transformations, tend to advance, upgrade or improve one aspect – IFRS 17 impacts a number at once.

In summary, there is much to encourage us to remain positive that IFRS 17 programmes can move the Finance agenda forwards. In my view, the move to a more real-time transparent cross-functional capability is inevitable – the question is one of pace. Whilst IFRS 17 programmes will not, in the main, be the one-stop answer, they should be pushing us towards, and not away from, that future.



Richard Marshall - Partner, UK IFRS 17 Technology Lead, Deloitte

Richard is a UK Consulting Insurance Partner and has been with the firm for over 10 years. He has delivered a number of complex technology and Finance Change programmes for insurers and is the practice lead for Technology Insurance in the UK. Richard’s specific areas of focus include: regulatory change; actuarial technology; offshore delivery models; data warehousing; finance transformation; outcome-based delivery models; programme leadership.



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