As underwriting firms across the globe prepare to migrate from International Finance Reporting Standard (IFRS) 4 to IFRS17 by 2024 implementation date, insurance operators in the country have expressed readiness for the full adoption of the new reporting standard in the country.
IFRS 17 (previously known as IFRS 4 Phase II) is an International Financial Reporting Standard developed by the International Accounting Standards Board (IASB) providing new standards for reporting profit emergence from insurance contracts, initially scheduled to take effect from January 1, 2023.
Speaking on navigating the new IFRS 17 at a one-day workshop organised by Leadway Assurance 2023 Training for journalists in Lagos, Raphael Akomolede, from Leadway’s Finance Department, said the implementation of the IFRS 17 current standard will help users of accounts make sensible comparisons between companies, their past performance, current financial position, and risk exposure not only in Nigeria but globally.
Akomolede, who also gave insights on the position of the firm regarding the implementation of the IFRS 17, said the insurer has completed solution design, which takes care of Gap Analysis, Financial, and Operational Impact Assessment; Designed for Future State of Finance Process/Technology Gap Analysis; Development, Documentation, and Review of Target Operating Model; Preparation of Technical documents and Reviews, and Vendor Selection for IFRS 17.
He said currently , the relevant departments of the company are working simultaneously on System testing and Implementation (pre and post); Reviewing and Producing 2021 and 2022 financial positions, produce interim IFRS 17 compliant financial statements, including transition disclosure.
Speaking on the problem with the soon-to-be-replaced IFRS 4, he said the IFRS 17 replaces the interim standard that allows insurers to use local Generally Accepted Accounting Principles (GAAP) to measure insurance contracts; no single way to account for insurance contracts; existing accounting makes it hard for investors to see which groups of contracts are profit-making and which are not.
The impact of IFRS 17, according to him, includes improved comparability for the first time; relevant and updated measurement of insurance contract liabilities; a more intuitive presentation of financial performance and position; enhanced disclosure and transparency and a clear distinguishing of insurance activities from investment activities.
While commending the National Insurance Commission (NAICOM) for the Roadmap for the implementation of IFRS 17 for the industry in Nigeria, he said the commission has been working seriously since 2019 towards ensuring the full adoption of IFRS 17 in the Nigerian insurance industry.
Speaking on ‘Breaking Down the Power of Synergy,’ the Strategy and Special Project Department, Leadway Assurance, Joshua Ogbeifun, highlighted the strategy adopted by the firm in enhancing its ambition of remaining the dominant insurance company in Nigeria in revenue and profit market share within the corporate and retail market segments.
He said the company is focusing on becoming a customer-centric organisation with an efficient sales process and structure, partnering with organisations with the reach Leadway is seeking by providing data-driving customer insights and customer-led solutions.
Ogbeifun, also noted that low penetration is a major challenge facing the industry, and underscored why stakeholders must play their role to increase the uptake of insurance across the population.
Ogbeifun, while stating that insurance penetration in Nigeria at 0.3 per cent shows that the country is lagging, noted that something needs to be done collectively.
While advocating for simplification and personalising insurance products and services to meet the yearnings of the insuring public, he charged the regulators to put an adequate regulatory framework in place.
