The results reveal a huge amount of work to complete in order to successfully deliver IFRS 17 ahead of the 2023 deadline, most respondents expressing ongoing delivery concerns resulting in the need to apply more shortcuts and simplifications to meet the deadline.
Notably, only 40% of the 26 large multinationals polled and only 20% of the other 244 companies expect to deliver fully prepared programmes on time. While 14 of the 26 participating large multinationals are planning a 2022 investor update on IFRS 17, most survey participants are not. Similarly, while some firms plan to publish Q1 2023 IFRS 17 accounts either voluntarily or because of local statutory requirements, most companies are not planning Q1 2023 accounts.
WTW estimates the cost faced by the global insurance industry to implement IFRS 17 at US$18 billion to US$24 billion, representing a 20% increase from its original estimate in 2021 and reflecting companies’ collective realization that more work is required than first envisioned.
“The next 12 months are critical for the industry to deliver IFRS 17 programmes on time. The survey results lay bare the true scale of the challenge that inevitably means pushing more work post the ‘go live’ date in order to maximize delivery confidence for the programme,” said Kamran Foroughi (pictured), global IFRS 17 advisory leader at WTW.
Other key findings from the WTW study include data, systems, and processes emerging as top current concerns from companies’ dry runs of IFRS 17, requiring some of the greatest investment. More than 10,000 people will be required to deliver IFRS 17 in the next couple years, leading WTW to predict challenges in insurers’ recruitment and retention in IFRS 17 programmes and related impacts. Most companies also expect a significant increase in people required to run valuation processes under IFRS 17 – but they are increasingly turning to transformation and harmonization across metrics to resolve this, including through the use of automation.