Insurance firms in Qatar are making good progress in preparing to implement changes that will ensure compliance with the new reporting standards such as IFRS 17 and IFRS 9, according to KPMG in Qatar.
Yacoub Hobeika, partner and Insurance lead at KPMG in Qatar said, “Globally, it is clear that insurance firms are making good progress in preparing to implement changes that will ensure compliance with the new reporting standards. In Qatar and the wider region, insurers are currently exploring the impacts of the changes they will have to make and how best to do this. Although implementation can be complex and costly, the benefits will be significant, enabling insurers to take a fresh look at their strategies and financial and actuarial processes.”
IFRS 17 is the new Insurance Standard focusing on insurance liability reporting while IFRS 9 is the Financial Instruments Standard, which impacts the valuation of insurers’ assets for accounting purposes.
Large insurers have stepped up their preparations for IFRS 17 and IFRS 9, but smaller insurers have fallen further behind in preparing, according to a new report, ‘In it to win it’ by KPMG International.
Sixty-seven percent of large insurers (with premiums over $10bn) surveyed are in the design or implementation phase for IFRS 17, with almost as many, 64%, in a similar place with respect to IFRS 9.
By comparison, among smaller insurers (with premiums under $1bn), only 10% and 25% have started design or implementation for IFRS 17 and IFRS 9, respectively.
However, even with the progress many insurers have made, major hurdles remain in making IFRS 17 and IFRS 9 operational. Ninety percent of insurers said they foresee difficulties in securing sufficient skilled people to do the job and half are worried about securing the necessary budget.
With the numbers of people required for this complex work, securing sufficient talent is becoming an increasingly acute challenge.
The report notes that globally, nearly half (45%), of the largest insurers already have teams of 50 or more and half of the mid-size insurers have up to 25 people assigned.
There is also a critical need to increased training across the business, and the majority of insurers have so far delivered training only for members of their implementation teams.
Despite the challenges ahead, virtually all, 97%, of the largest insurers surveyed, view implementing the new IFRS standards as an opportunity to transform their business, with a focus on process optimisation (identified by 77%), actuarial process enhancement (65%) and system modernisation (58%).