CASHING IN on transition . That said , a reduction in shareholders ’ equity was ' far from automatic ' for life carriers , according to the agency .
Operational gains
RNA Analytics ’ own analysis shows that many of the larger insurers invested heavily in ensuring teams have the skills and understanding to address the requirements of IFRS 17 . Some smaller and medium-sized insurers , meanwhile , struggled with those increased demands while still managing their business-asusual ( BAU ) activities . We have seen companies opting for the Premium Allocation Approach ( PAA ) approach to IFRS 17 rather than the General Measurement Model ( GMM ), which , whilst more complex , can arguably be better leveraged for other insights .
Whilst it is early days yet , outcomes depend very much on the thinking behind implementation . Generally , insurers have been implementing IFRS 17 because they had to , rather than looking at it as an opportunity for transformation .
Whilst there are geographical variations , in the short-term , our work with insurers has shown us that significant operational and technical gains have been made , through never-before-seen end-to-end functionality , greater accuracy and faster run times than previously achieved .
Our partnership with a large South American life insurer , for instance , has resulted in highly optimised processes that were formerly highly repetitive and time-consuming – and ultimately limiting for the business . Already , they have observed a saving in information generation and processing times and are now able to carry out scenario analysis and specialised tests that provide the company with a better horizon in more technical and financial areas .
Looking past the initial bedding-in period , the ‘ big picture ’ advantages of IFRS 17 will soon become clearer – both in terms of the transparency that was sought when initiating the new standard , as well as the additional benefits that will inevitably follow on from improved processes and visibility . � www . intelligentfin . tech
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