The vast majority of insurance companies worldwide are not prepared for the incoming accounting standard IFRS 17, despite recognising the significant risks it poses to their business

Data from 240 insurance firms reveals that 92% have yet to put their solutions in place, and that 88% know they will need to invest in new processes to support disclosure requirements.

That is according to a new report by Aptitude Software, with chief technology officer, Martin Redington, warning IFRS 17 will be the “most significant change to insurance accounting that has ever taken place”.

“Time is of the essence. It is a massive project with significant risks, and there is not a one-size-fits-all solution, bespoke solutions are required,” he said.

“Insurers need to be selecting their vendors now and working on implementing IFRS 17 financial accounting solutions to avoid the skills shortage and ensure they comply in time.”

The report shows that 78% of insurance companies are still in the early research and impact analysis phase of implementing the accounting standard, which comes into effect at the start of 2021.

It identifies a wide range of challenges that insurers will need to overcome, with 84% of firms having cited having a disparate actuarial environment as being a constraint to delivering consistent calculations.

In addition, it was found that 39% of insurance companies expect to kick off their implementation projects in the second quarter of this year, suggesting a huge demand for expertise at the same time, and a potential skills shortage.

Ernst & Young estimates that smaller life insurers with less than $10bn (£7.4bn) of gross written premium will need a budget of $25m to comply with IFRS 17, while those with more than $25bn will need to spend approximately $150m.

“Insurance company profits are under duress as many sectors have become commoditised and many firms recognise the need to innovate their offerings and operations,” Redington continued.

“In a post-IFRS 17 world, it will be difficult for CFOs to service the many financial and regulatory requirements without an approach that centralises control of reporting and financial data.

“IFRS 17 is already proving to be the straw that broke the camel’s back, driving insurance CFOs to modernise their financial systems.”

Insurers implementing the International Accounting Standards Board (IASB)’s new IFRS 17 will find the process a major challenge due to the huge scale of the operation, according to Willis Towers Watson.

From 2021, insurers across the world will be expected to use the IFRS 17 reporting standard – the first global accounting standard for insurance contracts.

The current standard, IFRS 4, has allowed local Gaap to be used as a guide in each country, leading to little consistency across borders and among multinationals.

The big change under IFRS 17 will be to increase transparency, giving investors a clearer picture of the returns they can realistically expect on investments and the risks involved.

The new rules require companies to recognise profit when insurance services are delivered, rather than when premium payments are received, as well as to provide information about insurance contract profits that are expected to be recognised in the future.

Complying with the new accounting practices is expected to impact profit, equity and volatility, as well as reserving and financial reporting processes, actuarial models, technology systems and, potentially, executive compensation.

The IASB has warned that applying IFRS 17 will require many insurance companies to gather new information, employ or develop people with appropriate skills and make changes to their financial systems.

Companies are also expected to incur costs in educating staff, updating internal procedures and communicating changes in their reports to external parties. Such activities may involve significant time, effort and cost, the IASB said.

Insurance companies are also expected to continue incurring costs in applying IFRS 17 on an ongoing basis. These will mainly arise from gathering the necessary information to update assumptions for measuring insurance contracts on a current basis.

However, carriers with operations in multiple jurisdictions are expected to reduce costs by applying a globally consistent model for their contracts, which will replace the current country-by-country system.

In addition, the new standard will simplify the measurement of some short-term contracts, such as those with a coverage period of 12 months or less, while a carrier will be able to apply the new requirements to a group of contracts, rather than on a contract-by-contract basis.

And IFRS 17 does not apply to some common contracts issued by non-insurers, such as most product warranties.

Kamran Foroughi, director at Willis Towers Watson, said IFRS 17 was more than just an accounting change and would have a wide and significant impact on insurers’ operations.

“The big change under IFRS 17 will be more transparency,” for investors, he continued.

“However, it will take some time for investors to understand the new information.”

Martin Bradley, EY’s global insurance finance, risk and actuarial leader, called the new standard “the most significant change to insurance accounting requirements in 20 years”.

His colleague Kevin Griffith, EY’s global IFRS 17 accounting change lead, added: “While the standard will not become effective for a few years, the impact is likely to be felt much sooner by insurers.

“Investors are likely to ask for expected impacts ahead of the implementation date, and the decisions made by insurers at the date of transition to the new standard will have a significant impact on future profitability.”

Successful City based Insurance Company requires a Part Qualified Accountant for a Group Accounting role.

Working in a small team you will be assisting in Group Reporting to the US Parent, Regulatory Returns, Statutory Accounts, effective cash flow/cash projections and other ad hoc work.

This is a broad role that will offer you the opportunity to gain a full view of a Finance Function while completing your Qualification. Clear progression is also on offer.

Candidates should be studying towards an accounting qualification as well as having previous Insurance experience. US/UK GAAP.

Assistant Financial Analyst required by market leading City based insurance company.

This role supports the Group Financial and Planning Manager and Financial Analyst in the production of the annual business plan, quarterly reforecasts, and ongoing rating agency liaison work.

The incumbent will play a significant role in ongoing automation initiatives and related ad hoc financial planning and analysis requirements as well as assisting with wider Group Finance initiatives.

Main Duties

Supports the preparation of the annual group business plan

• Operation and maintenance of the excel-based planning models including ad hoc updates and improvements
• Involvement with technical underwriting planning and non-technical expense planning
• Liaison with the segment finance teams, outwards reinsurance and actuarial to gather deliverables in a timely and professional manner
• Supporting the production of the business plan presentation including statistical charts and graphs
• Attends planning working group meetings and becomes a known source of knowledge for planning matters
• Assists with maintenance and improvement of planning process documentation and policy

Assists with the quarterly reforecasting process

• Operation and maintenance of the excel-based reforecasting models including ongoing improvements and review of the process
• Liaison with the segment finance teams in the UK, US and Bermuda to gather data and information in a timely and professional manner
• Supporting the production of the reforecast presentation in the board pack including statistical charts, graphs and commentary

Involvement in the Planning Improvement Project

• Proactively becomes involved in the ongoing planning improvement work, both supporting with delivery of Phase I for the 2015 planning seasons and contributing toward Phase II in 2016
• Assists with project management and administration, including preparation of presentations and reports
• Attends project meetings and contributes ideas on further improvements and initiatives
• Becomes involved in selection of the planning tool

Provides support on Ratings Agency matters

• Becomes  familiar with the ratings agency capital models
• Assists with the production of capital slides for the quarterly board packs
• Takes ownership of a number of the ratings agency surveys and in time manages the production of these

Provides ad hoc support

• Supports Group Financial and Planning Manager and Financial Analyst in their work, in addition to answering ad hoc queries and supporting members of the wider group finance team.

Education/Experience

• ACCA/ACA/CMA part-qualified accountant with experience of working with data and excel models.
• Experience of financial planning and analysis would be beneficial.

Skills:

• Essential that the incumbent has some experience of data flows through complex excel-based models
• Strong IT skills; advanced excel ideally including VBA, Microsoft packages, database and internet software
• Proactive mind-set and desire to learn and improve own skills
• The level of skill expected of a part-qualified accountant, in particular for written and verbal communications, organisational skills, analytical skills, self-motivated, team player.
• A strong audit, documentation and control background

Job Description

Job Purpose:

Assisting with production of all Lloyd’s, PRA and other external reporting requirements

Key Responsibilities:

• Completion of syndicate Quarterly Monitoring Returns (A) & (B) so that business complies with Lloyd’s of London requirements
• To assist in the preparation of the Insurance PRA Returns for (UK Branch).
• NAIC reporting to Group, specifically completion of Schedule F Part 1 and T to be consolidated into Group return.
• Assist in the preparation of Solvency II reporting requirements for the syndicate including QMC, TPD, GQD, QAD and AAD
• Ensure all UK GAAP ledger entries relating to the syndicate are complete so that external reporting requirements can be met
• Run and update syndicate reporting packs on a quarterly basis so that the quarterly returns can be completed
• Assist with the analysis of profit and loss and balance sheet variances for syndicates
• Complete quarterly syndicate UK GAAP and US GAAP reconciliations and all other reconciliations
• Prepare audit files and liaise with external auditors so that the year-end and half-year audit for the Syndicate is successfully completed
• Liaise with the investment management team in the US , and investment managers to ensure that investment data is complete and available for syndicate reporting purposes
• Provide the Legal Entity reporting team with syndicate data so that Syndicate Annual Reports and Accounts can be completed accurately and in a timely manner
• Preparation of Syndicate Information Statements (SIS) in respect of US tax requirements
• Assist with the completion and submission of other annual returns such as TRIA and NAIC IID returns to comply with Lloyd’s of London requirements.
• Assist with queries from Lloyd’s, management, actuaries etc
• Review and update syndicate accounting processes.
• Other duties include liaising with internal audit and actuaries, providing data to management, and ad-hoc duties such as involvement in projects including the Solvency II project.

Job Requirements

Skills and Experience Specification:

• Knowledge of the insurance industry specifically within a finance department
• Strong experience of Lloyds accounting (3-5 years)
• Accounting qualification or part qualification
• Strong organisational and analytical skills
• Confident in MS Word and Excel

• Good communications skills
• Professional approach and delivery of work product
• Ability to multi-task and meet critical deadlines
• Knowledge of PeopleSoft desirable but not essential
• Professional, positive attitude, reliable, team player, adaptable, committed, self-motivated

The primary responsibility of this role is to ensure that all technical accounting is produced in a timely, accurate and complete manner, together with the ability to quality control technical data through analytical review.  The role will involve liaising with the Offshore teams to ensure they are provided with sufficient information, support and training to enable them to complete their objectives.

The job holder will play a key role in appraising the Offshore finance team and technical accounting processes as well as defining deliverables required from other teams (including the actuaries).  The role will also be required to respond to and identify questions raised by the Financial Reporting and analysis team.

The role will additionally cover assisting other team members in completion of Lloyd’s returns – both UKGAAP and SII.

A well known City based Insurance Company require a Qualified Accountant to work closely with the Finance Director on the Implementation of a new General Ledger.

Candidates should have an in depth understanding of Peoplesoft and great attention to detail as well as  Insurance experience.