Business Change in 2022
January 2022
The financial crisis of 2008 fundamentally altered the environment for the Financial Services industry and since then banks and insurance companies have spent hundreds of £ millions on regulatory compliance initiatives.
In the insurance world for example, IFRS 17 will continue at the forefront of insurance companies thinking until 2023 and beyond. Designed to achieve the goal of consistent, principle-based accounting for insurance contracts, IRFS17 requires insurers to integrate data from across their organisation and create a single version of the truth. However, the “golden source” data created not only enables them to meet their regulatory obligations but also to access granular data that was previously inaccessible. It is a classic case of the law of unintended consequences.
In December 2021, the International Accounting Standards Board (IASB) issued Initial Application of IFRS 17 and IFRS 9—Comparative Information (Amendment to IFRS 17). The amendment is a transition option relating to comparative information about financial assets presented on initial application of IFRS 17. The amendment is aimed at helping insurers to avoid temporary accounting mismatches between financial assets and insurance contract liabilities and therefore improve the usefulness of comparative information for financial statement users. (https://www.ifrs.org/projects/completed-projects/2021/initial-application-ifrs-17-and-ifrs-9-comparative-information-amendments-to-ifrs-17/)
2022 is likely to be a challenging year for the insurance industry. For jurisdictions working towards a 2023 effective compliance date, the pressure has increased and the next six months will be critical if the deadline is to be met.
Millennium Consulting believes that compliance with the new regulation can allow insurers to become disrupters, digitise their processes and fundamentally re-engineer their Target Operating Models.
So, whether your actions are driven by regulatory compliance or from the desire to adopt best practice, Millennium is here to help. Our team are experienced financial markets professionals with deep domain expertise, be it products, market mechanisms or the business and regulatory drivers that are shaping the industry. Working with many of the world’s leading financial markets and insurance companies we help them define, manage and deliver the change they need to achieve market leadership.