The total cost faced by the global insurance industry to implement the IFRS 17 accounting standard is now estimated to be US$21-27bn, according to a worldwide survey by WTW.

The study, which polled 235 insurers from 37 countries/markets, found that the implementation cost has risen by 15% compared to 2022.

Average cumulative programme costs for the largest multinationals are now predicted to be US$240m each, and US$30m each for the remaining insurers.

Insurers reported that substantial work is still needed to better understand and explain IFRS 17 results and improve business as usual reporting processes. According to WTW, data, availability of skilled resources and systems/technology remain the three greatest challenges associated with IFRS 17 for insurers.

Sixty-eight percent of the insurers surveyed were reporting for the first time during 2023, with just 55% of this year’s reporters feeling “very confident” in explaining IFRS 17 simple scenario results to senior management or investors. This falls to only 18% and 9% when explaining complex scenarios and extreme scenarios respectively. More than half of 2023 reporters are not ready to perform business planning/P&L projections based on IFRS 17/9.

Kamran Foroughi, global IFRS 17 advisory leader at WTW, said: “With insurers facing hefty costs to implement IFRS 17, future investments need to be strategic and targeted, delivering quick and tangible benefits. Substantial operational efficiencies also need to be found to maximise the benefits of IFRS 17 and move the reporting into business as usual.”

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