AxiomSL’s solution for International Financial Reporting Standard 17 (IFRS 17) addresses key aspects of the new Insurance Accounting Standard for Insurance Contracts. Our strategic solution is well positioned to efficiently address the complex data challenges as well as portfolio aggregation/cohorts, measurement, tracking of Contractual Service Margin (CSM) all the way to reporting the final results in IFRS taxonomy.
IFRS17 will be effective from 1st January 2021 after nearly 20 years in the making. The new standard is an update of IFRS 4 and was formerly known as IFRS 4 Phase 2. With the main objective to introduce a consistent accounting model for all insurance contracts, the International Accounting Standards Board (IASB) developed the standard to provide a single principle-based framework to account for all types of insurance and reinsurance contracts. As IFRS 17 proposes three measurement approaches, General Measurement Model (GMM), Premium Allocation Approach (PAA), Variable Fee Approach (VFA), it is critical for firms to have the right data, infrastructure, governance and processes in place to ensure accuracy in measurement and the approach adopted to compute CSM.
AxiomSL’s clients benefit from our inherent data management, reconciliation, flexibility, traceability, transparency, automation, reduced Total Cost of Ownership (TCO) and quick time to market capabilities whilst increasing operational efficiency and reducing operational risk.
AxiomSL’s IFRS 17 solution offers the flexibility of portfolio segregation as well as the measurement of CSM at each contract and portfolio level under all three methods (GMM, PAA, WFA), including aggregation of results up to portfolio level. The solution has built-in reporting capability to report both the IFRS taxonomy and income and balance sheet statements. Once calculations are in place, postings are also generated automatically within AxiomSL’s platform.
AxiomSL adopts a flexible approach towards client requirements as one size does not fit all. With flexible data modelling capability and with a solution which is tracked and maintained by our business analysts, firms benefit from a reduced Total Cost of Ownership (TCO).
- A single platform that integrates whole or part of the end to end process to meet IFRS 17 requirements
- Seamless aggregation of data across multiple data sources from policy, risk, finance and business to give one single view
- Flexibility to run simulation and projections
- Visualisation dashboard of results across multiple time frames
- Measurement of CSM at both portfolio and contract level
- Ongoing monitoring of any changes to the standard
- Streamline and automate the measurement and reporting process
- Allow users to drill down to the logic and source
- Automate the end to end workflow as well as create user-defined workflows
- Interface with client’s data, infrastructure and workflow processes without any data conversion
- Provide comprehensive traceability/data lineage on how data flows upstream and downstream
- One of the biggest challenges of IFRS 17 is the grouping of contracts with similar profile and similar risk characteristics.
- The granularity of measurement across a diverse set of portfolios across different methods (GMM, PAA and PFA) to compute the final CSM and track it on a daily basis.
- Day one reporting for measurement stands out as one of the key challenges under IFRS 17. Once the CSM, FCF and other metric measurements are complete, the next challenge will be to report these in financial statements. The frequency of reporting under IFRS 17 should not be underestimated.
- This new change in statutory reporting will require more coordination between IT, finance and actuarial teams. Firms should be capable of running their individual processes in compliance with the accounting principles as business as usual (BAU) activity.
- The insurance contracts measurement process is highly intensive in its nature, impacting all the steps from how the contract is booked to portfolio aggregation, identification of onerous contracts, measuring CSM at the portfolio and sub-portfolio level as well as reporting it in the balance sheet and income statement.
AxiomSL launches end to end solution to address complex IFRS 17 requirements
AxiomSL today announces the launch of its IFRS 17 solution, which offers an industrialised end to end process to efficiently address the highly intensive IFRS 17 requirements.