Setting the standard
It may be an imposing project for insurers, but with the correct recruitment strategy and positive attitude, IFRS 17 could be turned into a big opportunity.
Twenty years in the making, IFRS 17 comes into effect on 1 January 2021. But unlike most New Year’s resolutions, it’s something insurance companies have to take seriously and ensure they’re completely compliant by the time the deadline comes to pass.
Why’s it happened?
IFRS 17 is designed to standardise accounting models, with the goal of providing investors with more useful information that they’ll be able to compare across the industry internationally.
Of course, this will come at a significant cost to businesses which have to implement the changes. Looking on the bright side, it will also provide them with opportunities to modernise.
The impact on insurance
The new standard will have wide-ranging implications for insurance companies. Unsurprisingly, the biggest impact will be on financial reporting. Companies will be forced to develop new policies and procedures, redesign year-end reporting, and store and process more data. It will all have to be rigorously tested, too, to ensure it runs smoothly.
For many companies, keeping up with the new and increased demands will inevitably mean they need to hire more staff with a wide range of skills. But, perhaps most importantly of all, if a company doesn’t have a designated expert with both detailed knowledge of the exact requirements of IRFS 17 and its wider implications, now is definitely the time to find one.
A significant challenge
Finding potential candidates with the right expertise and levels of experience is already proving to be a challenge for businesses. Deloitte is already calling out for qualified people across the globe to bolster its consulting capabilities, and the very fact it is advertising for candidates suggests it is not finding it all plain sailing.
IFRS 17 leads will require an unusual mix of detailed knowledge of financial reporting, stakeholder management and insurance accountancy, topped off with a broad actuarial understanding and strong project management skills. Ideally, they should also have experience of leading companies through transformational change. It’s not difficult to see why these leaders are hard to find, and in high demand once they are.
Which other skills will you need?
The impact of IFRS 17 on recruitment is huge. For candidates with the right knowledge, there’s an excellent opportunity as companies look to snap up those with the required talents.
Technical skills are obviously very important for businesses. IT teams will see a big change as the new data, processes and systems the ruling requires, need to be implemented by someone. Given the opportunity it presents to modernise, skills like process auditing, workflow analysis and workflow automation will be key.
During this process, the value of relevant soft skills shouldn’t be underestimated, either. The control has brought about an unavoidable period of business transformation that needs to be managed in parallel with BAU activities – this requires professionals who are adept at leadership, communication and change management in particular.
While it is a large imposition for many insurers, your approach to IFRS 17 will define the outcome. Recruit the right people to implement the right processes and systems and you could gain a significant advantage on competitors that do the bare minimum.