Delivering IFRS 17

Scale, Challenge and Opportunity

IFRS 17 WILL HAVE A HUGE

IMPACT ON HOW INVESTORS
VIEW INSURERS

CONTENTS
Executive summary .......................................................................................................................................................... 4
Introduction ...................................................................................................................................................................... 6
1. Planning for IFRS 17 .................................................................................................................................................... 7
Seven basic questions ................................................................................................................................................. 8
1.

Why are we doing this? ....................................................................................................................................... 9

2.

What are we going to do? ................................................................................................................................. 11

3.

Who will be affected? ........................................................................................................................................ 12

4.

Where will it happen? ........................................................................................................................................ 14

5.

When will it happen? ......................................................................................................................................... 16

6.

How are we going to do it? ................................................................................................................................ 17

7.

How much will it cost? ....................................................................................................................................... 19

2. Delivering IFRS 17 ..................................................................................................................................................... 20

Major considerations .................................................................................................................................................. 20
Delivery options .......................................................................................................................................................... 21
Establishing a programme to deliver IFRS 17 ............................................................................................................ 26
Delivery Schedule and road map ............................................................................................................................... 28
Anticipated Issues, risks and opportunities in delivering IFRS 17 .............................................................................. 30
Next steps for insurers ............................................................................................................................................... 33
3. Innovation is delivering IFRS 17 ................................................................................................................................. 34
Innovation IFRS 17 capabilities .................................................................................................................................. 34
Innovators .................................................................................................................................................................. 34
Innovations clients ..................................................................................................................................................... 34
Innovations approach delivering change in businesses............................................................................................. 35

2014, 2015, 2016, 2017. Written by Stephen Porteous at Innovation.

This publication will be periodically revised and updated. For the latest version please see link: www.innovation.co.uk
This publication may not be stored, copied, forwarded or printed without permission. Please contact us if you would wish to do so.
If you seek permission, we are likely to give it.

EXECUTIVE SUMMARY
IFRS 17 will be the biggest challenge the insurance
industry has faced in a generation. The finance operating
model of every insurer working within an IFRS jurisdiction
will have to be re-engineered. IFRS 17 will be effective 1
January 2021, with insurers required to produce
comparative accounts for 2020.
IFRS 17 will bring unprecedented challenges
to insurers in how they maintain confidence
of investors, how they deliver the required
change, how they manage their businesses
and how they sustain an affordable back
office.
From our IFRS 17 delivery work for
insurance clients, we see key areas that will
be impacted. We have identified these in the
adjacent diagram, (figure 1) where the boxes
coloured orange indicate the areas of the
process that will change as a result of IFRS
17.
Depending on insurers approach and
motivation, it may be possible to work
towards minimizing the impact of the huge
increase in operational work and cost.
Essential steps such as alignment of internal
accounting policies, construction of better
operating models or increasing levels of
automation may need to be taken to reduce
risk and limit impact.
To ensure successful delivery and
implementation, incremental resources will
be required to deliver the change in a
structured and coordinated manner.

Available resources will be limited, so smart

new ways of delivering change will need to
be adopted. In our experience of delivering
change, the later the project is started, the
less organized it will be and the more
expensive it will become as insurers
compete for scarce resources.
Delivery dates are fixed and the quality is
non-negotiable, which leaves as the only
variables: investment cost versus operational
cost.
Ultimately IFRS 17 marks an opportunity for
insurers to work smarter, but first companies
need to actively embrace and deliver the
change. As a partner for change, we are
working to support insurance businesses
successfully deliver change through the
IFRS 17 period.
We at Innovation recommend that insurers
actively engage with a range of suppliers to
understand their best options for successful
delivery. This is a condensed summary of
the changes facing insurers. For more
information, contact
stephen.porteous@innovation.co.uk

A summary of the next steps for every insurer is illustrated on page 33. For more
information see: www.innovation.co.uk

Figure 1. Workflow of the decision-making process to enable IFRS 17 delivery

5

INTRODUCTION
A change is coming that will transform how investors view insurance companies and will
revolutionise how insurers manage themselves.

IFRS 4 TO IFRS 17
Over the last twenty years, measurement of profit and
loss has been transformed across the globe by the
implementation of International Financial Reporting
Standards (IFRS). These standards have enabled
businesses to operate across borders and speak the
same financial language, thus becoming more
comparable for investors. The major standard for
insurance contracts is IFRS 4, initially released in 2004
and revised in 2005.

IFRS 4 has always been considered an interim

standard because there are still large differences
between how profit and loss is measured between
different countries meaning that statements of insurers
are not directly comparable. In a recent speech Hans
Hoogervorst, Chairman, International Accounting
Standards Board (IASB) illustrated the current
difference between how one insurance entity is
measured in two different countries in table 1 below.

A FULL INSURANCE CONTRACTS STANDARD

Since 2005 the IASB has been working on a revised
insurance contracts standard to be known as IFRS 17
and probably released in the first half of 2017. The
IASB has confirmed that IFRS 17 will be effective as of
1 January 2021. The principal aim of the standard is to
eliminate the kinds of differences seen in the above

illustration. This standard will fundamentally change

how insurers measure themselves and will require a
substantial shift in their business management and
back-office operating models. The balance sheets of
insurers will radically change and so therefore will
investor perception and market valuations of insurers.

FOCUS ON PLANNING FOR CHANGE

There is a good body of material available on what the standard will mean, but little has
been communicated in the public domain about how to deliver IFRS 17. We aim to fill
that gap by providing this paper that will allow leaders of insurers and delivery firms to
understand the scale of the challenge and what the next steps are in designing and
planning the change. Our purpose here is to communicate and inform insurers of the
changes they will face:

We ask the strategic questions that will shape

their approach
We illustrate the likely impact on business
management and back-office operating models
We outline the actions required to deliver those
changes
We identify some of the strategic issues, risks and
opportunities faced by insurers
We pay special attention to the impact the
standard will have on investor perception of the
outcome of IFRS 17 implementation

Starting with the London Stock Exchanges Big Bang,

Innovation Business Vision has been a firm that for 30
years focusses on strategy, planning and managing
the delivery complex business change. We have been
planning and managing the delivery of IFRS 17 work in
the Europe and Asia since 2014. We can support
insurers and delivery firms plan and manage the
delivery of IFRS 17.

THE NEW STANDARD WILL CHANGE

THE BALANCE OF ACCOUNTING
ACTIVITIES AND PUT ACTUARIAL
WORK AT THE CENTRE OF
CORPORATE ACCOUNTING

1. PLANNING FOR IFRS 17

This section is about asking the questions that will expose the scale, challenges and
opportunities in each business that will enable them to effectively plan for a successful
delivery.

SEVEN BASIC QUESTIONS

Initiating any large business change exercise is best
done by asking questions about the circumstances of
the change. These questions and their answers will
inform the optimum strategic direction and method for
change. In their most basic form there are typically

seven questions, here we ask those questions and

categorise those question into the major components
of a business; organisation, business processes and
supporting systems.

Figure 2. How asking seven basic questions aids planning and delivery of change.

Undertaking such an exercise is akin to a due diligence

and doesnt have to be a mass mobilisation. It can be
undertaken by a small group of people well connected
in the business and facilitated by others who
understand how to shape and plan complex business
change exercises.
The earlier these questions are exposed, the sooner
the constraints, issues, risks, opportunities and

dependencies will be understood. It is possible to build

a strategy that enables effective planning and ensures
that strategic decisions are made before they become
critical, cause delays or increase cost. The questions
and their components will have to be faced at some
point. If these are only explored after the work has
commenced, then the quality of the delivery will be
diminished and costs will inevitably rise. Here we
explore those seven basic question:

1. WHY ARE WE DOING THIS?

This question has an obvious and immediate answer because we have to. Even so, to believe that it is the
complete answer would be to miss the opportunity to
understand what the drivers of change are for IFRS 17.
Another view is that implementing IFRS 17 really
matters to a number of stakeholders including
investors and regulators (see table 2).

investor impact over multiple years. So a valid answer

to the why? question could be to understand the risk
and minimise the negative impact of investor
perception. Other answers to an insurers why? will
include decisions about the drivers of change:

The standard has been driven by the IASB and long in

development. This is because stakeholders around the
world believe that fundamental changes are required in
the way that insurers measure themselves. In
exploring this question, the business can begin to
understand and organise what it can do to allay
potential stakeholder concern. By understanding
stakeholder concern, insurers can identify elements of
their business that can be improved to lever
commercial advantage compared to other insurers.

For example, investor perception; If insurers choose

to change early, then there will be a corresponding

What we need to do to improve investor

confidence
Where the insurer intends to operate by 2021
Whether to undertake back-office house-keeping
Whether to align processes, standards and
methods across the business
Whether to change the businesss risk
management and investment approaches
Whether there are any current internal practices
that need to be modified prior to the effective date.

Addressing these fundamental points early and

correctly can lay the building blocks of strategic
advantage.

IFRS 17 WILL BE THE BIGGEST

ACCOUNTING CHANGE FOR
INSURERS IN A GENERATION

Table 2. Drivers for, and in delivering IFRS 17

10

2. WHAT ARE WE GOING TO DO?

Insurance businesses will face significant changes to the way they operate their finance
and actuarial operations.
Figure 3 below illustrates a high level operational flow
for an insurance close from entity to parent. The boxes

coloured green shows the areas of the business

process which will change as a result of IFRS 17.

Figure 3. A generic view of an insurance companys accounting and valuation process.

Policy administration data will largely remain

unchanged as long as it supplies the right quality of
information to the models and ledgers.

The disclosures and statements will change too. There

will be up to 60 new reporting lines and a great deal
more transparency than there is now.

Policy categorisation will change into one of the three

measurement models. There will also be a change to
loss recognition for policies which may require systems
to be adjusted. At this point the volume and complexity
of information will significantly increase compared to
today.

Depending on the insurers approach and motivation, it

may be possible to work towards reducing the number
of parallel ledgers it uses. It can do this by aligning its
accounting policies between local entities and parent
company. This will reduce the complexity and
operational cost of the close work.

The valuation models will change, as will profit

emergence patterns becoming a lifetime measure.
Current assumptions will change and new assumptions
will be added. A number of insurers have built
prototypes of these models and some suppliers to
insurers have generated commercial models that can
be added to existing finance and actuarial systems.

All of this adds up to a substantial change that will

mean that ultimately all of the insurers accounting and
valuation processes will change. Awareness of the
need for wholesale change will enable every insurer to
adopt a more strategic approach to its change
management.

11

3. WHO WILL BE AFFECTED?

The five major stakeholders in an insurance business are investors, customers, workers,
regulators and suppliers (see table 3)
Investors are likely to change their perception of
insurers in a way that shadows the impact that the
Basel accords and MIFID has had on banks. Insurers
do not necessarily compete with other insurers for
investor capital. They often compete against other
geographically or demographically placed competitors
in other industries. These competitor companies will
not face a similar change in financial reporting and it is
possible they will be seen as more stable investments
in the 2018 to 2022 period. It is therefore imperative
that insurers provide to investors the kind of
information that can reassure investors, preventing
shocks when the revised revenue, income and capital
positions are released.

Innovation is currently undertaking a

study on the impact of IFRS 17 and
business readiness for it, focussing on
Investors, Insurers, Regulators and
suppliers to insurers.
To participate please go to:
www.innovation.co.uk
Existing customers who are policyholders are unlikely
to see a major impact in the short-term because of a
likely lag in change of product portfolios. However, it is
reasonable to expect that product offerings will change
in the longer-term, as the impact of IFRS 17 reveals a
change in the loss and risk profiles of insurers. It is
possible that incoming policyholders are offered more

conservative products that are less attractive

compared to non-insurance products. Bancassurance
partners, brokers and agents are also customers, they
will be required to adapt their offerings rapidly once the
insurer revises its products. Bonus schemes are likely
to change too.
Regulators will have a role to play, they are in regular
dialogue with senior staff at insurers and will be keenly
interested in the revised capital position of businesses.
The initial results provided to regulators could prompt
them to compel insurers to modify a range of business
activities from product portfolios to reinsurance
arrangements. It is likely that regulators will make
specific detail changes within their jurisdictions too.
There is a possibility or risk that insurers have the
same kind of process of debate as was seen in Europe
for Solvency II with regulators and the IASB.
The workers are the people who will deliver the change
and operate in the new environment. IFRS 17 will lead
to a significantly different operating model requiring an
increased actuarial involvement during the close and
valuation processes. Calculation of net income will
become highly complex. The new operating models
will in fact put actuaries at the centre of periodic close
processes. Such a change will shift organisation
dynamics, structure and costs. Insurers could choose
to offset the likely cost escalation triggered by
increased actuarial involvement through investing in
higher levels of automation and more sophisticated
modelling. Both of these will be capital-heavy and
required at a time when skills specialists will command
a premium between 2017 and 2021. Whichever
strategy insurers take, their back offices will become
more complex and expensive.

Most insurers will require external support from a range of consultancies in delivering change. Some of the major firms
have customisable-off-the-shelf solutions available, some offer subject-matter expertise and others offer resource backfill. The challenge for insurers with suppliers is to secure resources before they become too scarce or too expensive.
For example, there are about 65,000 actuaries in the world, but a common view is that IFRS 17 will require equivalent
to 100,000. This type of shortage will drive prices up. It also indicates the need for smarter processes with higher
degrees of automation.
In summary, all stakeholder groups will be subject to unwanted changes and pressures. For customers and investors,
the impact can be minimised by careful management of the transition between IFRS 4 and IFRS 17 by putting good
planning and communication at the centre of the effort. Workers will face a different kind of pressure because people
are usually resistant to externally imposed change. Senior managers in the business will find their roles and
responsibilities changing and their levels of authority and culpability also shifting. Moreover, there will be an increased
resource requirement, not just to deliver the change, but in perpetuity.

Table 3. An insurers stakeholders in IFRS 17

12

13

4. WHERE WILL IT HAPPEN?

One hundred and sixteen countries have adopted IFRS, most others are working towards
it (see figure 4). They will roll out IFRS 17. The major exception is the USA which
maintains US GAAP. The imminent publication of IFRS 17 will move the IASBs
standards even further away from the USs, possibly leading to a permanent divergence
in the two sets of standards. American insurers will have to adopt the standard for all
their insurance entities in IFRS jurisdictions including Canada and Mexico. Determining
where to lead these initiatives from will be a key decision for each business.
Geographically there are essentially three ways of
delivering IFRS 17: firstly, develop local solution for
each entity, second, develop a group solution then roll
out, or thirdly, a hybrid of the two (see table 8, options
10 to 12on page 31). The optimal approach will
depend on which markets an insurer operates in. For
example: If a company operates 10 insurances
entities, but they are all within the European Union,
then the accounting and valuation requirements will be
exactly the same. It will make sense for a quite
centralised approach to deliver IFRS 17. However, if
that same company has an eleventh insurance entity
in, say Australia or China, where the regulators is
highly active, then there is real merit in proposing a
level of local solution.
Accounting processes will also be subject to
geographic decisions, for example whether to localise
accounting systems so they diverge from other entities
and more easily change to align to local requirements,
or whether to centralise. The latter could be more
expensive and time-consuming to develop, but would

14

lead to much more efficient operations after

completion.
Actuarial models will require similar decisions
whether to build central models with local shells or to
allow each entity to adopt its own version that suites its
needs? We at Innovation suggest that an approach
that allows local configuration of a core model is
usually the best approach because it maintains central
consistency, eliminates duplication and provides a
useful level of flexibility for local teams.
Another factor an insurer needs to consider is the
location of skills. Over the last twenty years we have
seen a surge in the diversity of locations in which
people can work from to achieve a single outcome.
However, we believe, that personal face to face
interaction still outstrips all other means of
communication. So in early stages where strategic
ideas are debated and discussed, we suggest that a
core team leads the work from a single location whilst
maintaining links to local teams.

Figure 4. World map of expected IFRS application in 2021

15

5. WHEN WILL IT HAPPEN?

Following the IASBs decision to confirm IFRS 17 will be effective on 1 January 2021, it
has targeted release of the final standard as March 2017. This means that for businesses
with normal January to December accounting reference period, the first IFRS 17 annual
statement for most insurers under will be made between January and March 2022.
As with any IFRS change, insurers will be required to
produce comparative accounts. The IASB has made a
major concession to insurers, they will only be required
to produce three balance sheets and two income
statements for their first set of IFRS 17 accounts. This
means that comparative accounts will only be
mandatory for 2020. However, investors may demand
more.
Most insurers have commenced some work on the
technical aspects of IFRS 17 or started engagement
with external suppliers, but not mobilized full size
delivery teams. At Innovation we believe that IFRS 17
delivery work will have a noticeable impact on resource
availability by September 2017. The number of people
involved will climb steadily and peak in 2018 and 2019.
Experienced resources are likely to be scarce and
expensive during this period.
Insurers can choose to implement IFRS 17 early. Early
adoption is unlikely to be beneficial to an insurer

Figure 5. Major milestones for IFRS 17

16

unless analysis of its new income and equity positions

are favourable from an investor perspective. Early
adoption of IFRS 9 and IFRS 15 would also be
required. Alternatively, it is possible they could, to
some extent choose to deliver late, but only up to
eleven months and at a heavy price: by changing their
accounting reference period prior to January 2021. A
costly exercise, it would require all manner of technical
and back-office changes. It could also leave investors
suspicious. Moreover, it would not be allowed in
jurisdictions where insurers have legally defined
accounting periods. For more information, see table
10, options 15 and 16, page 25.
We are uncertain when investors will start to take
notice of IFRS 17. However, when they do, demand for
information is likely to increase, adding burden to
finance, actuarial and investor relations teams. There
are many more timing factors to consider. We can
work through these with you, however the major
milestones are illustrated in the next figure.

6. HOW ARE WE GOING TO DO IT?

EVERY INSURER HAS A NUMBER OF OPTIONS
The delivery of IFRS 17 will be a long and complex process. Understanding delivery options will enable insurers to plan
their businesss work in the most cost effective manner. Below is a list of high-level strategic delivery options with
Innovations view of the merits of each. Their relationship with the overall flow of delivery decisions is shown in figure 2
on page 8. Later sections of this paper will build on these options with fifteen more and discuss how to set them up for
success.

STRATEGIC OPTIONS
Strategic options

Merits and risks in each approach

1. Deliver the minimum change

to become compliant

Even a minimum change will require large effort and expenditure. The new
complexities of IFRS 17 will not have been managed down. This option will also
lead to a higher operational cost than a more optimised approach.

(Do minimum option)

In addition, pursuit of a do minimum approach would exclude communication

with investors. This activity would have a sizable impact on the investor
perception and consequently market capital.
Despite this gloomy view, there is merit in pursuing minimum change for insurers
under particular circumstances. If, for example an insurer was targeting a
significant structural change, such as changing accounting and actuarial
systems in 2022 or later, then there would be merit in delaying complex
investment until the new operating environment is defined.

2. Deliver minimum change,

plus undertake work to
manage investor relations
(Do minimum, plus take care of
investors)

3. Optimise level of change to

minimise operational cost
(Pragmatic option)

Similar to the work above with the addition of work to specifically support
investor relationships.
A team could be generated and dedicated to managing investor expectations.
This would enable good investor management through this period. However, it is
likely to be a duplication of work that will have to be undertaken anyway,
doubling the costs in certain areas of work, plus exposing the business to
governance and audit risks. As such, it may be financially beneficial to pursue
the next option.
The level of necessary back-office change required of insurers will be massive. It
is unlikely that insurers will be forced to apply such large and structural changes
in their back-office operations for a long time. This being the case it would be
prudent for insurers to deal with structural and peripheral issues that have built
up in their operating models as their businesses have evolved.
Some of these issues could be resolved at low or zero cost in the course of
delivering IFRS 17, however, issues would first need to be acknowledged,
documented and understood. It could be useful for insurers to benchmark each
other. Benchmarking may appear to be an unattractive option, but as insurers
dont compete on their back offices and IFRS imposes greater transparency,
some insurers may find such activities advantageous.
Required cost of investment is unlikely to palatable to company boards unless
the investment cost is measured in comparison to operational benefit of
delivering the change in business cases.

17

4. Use IFRS 17 as an
opportunity to deliver
something fundamentally new
and different.
(Do maximum option)

Insurers may wish to take the opportunity to fundamentally re-engineer how they
manage their businesses. From the perspectives of business processes and
accounting standards this will be achievable in the pragmatic option above.
Nevertheless, even more could be done. Accountants and actuaries could target
full automation of their close processes. They could decide to replace longstanding models and have new management information systems delivered.
All of these are worthy pursuits, especially if the result is a slicker, quicker,
leaner and lower cost back-office that is able to rapidly respond to management
and investor demands. However, every additional initiative potentially increases
the complexity and risk in delivery.
In our view is it useful to begin the strategic design process by being idealistic,
then paring back delivery planning to align with budgets, risk, timing and
capability.
Early identification of the best ideas and improvements will enable the business
to make considered and timely decisions. Some proposals will be deemed too
risky, whilst others can be prioritised and properly managed (these end up
contributing to the pragmatic option).
One area we do propose caution on is in systems. Data entry, storage,
transformation, processing and reporting is highly complex in most insurers.
Insurers usually face a huge challenge in maintaining their legacy systems
(usually policy systems). Changing major systems during this period should be
treated very carefully. If an insurer is keen on changing major systems during the
IFRS development period, we would urge them to put contingency plans and
funding in place to maintain legacy systems in an IFRS 17 compatible manner
until the new systems are fully signed off. We do suggest though, that if systems
change is on any partys agenda, that they place particular focus on ensuring
good data standards, to enable good systems design.

Table 4 Strategic options for delivering IFRS17

There will be a large number of subordinate options to each of these strategic options. We discuss sixteen relevant
options in section 2, on pages 23 to 25.

18

7. HOW MUCH WILL IT COST?

The cost of work between 2017 and 2022 will vary according the strategic and delivery
options the insurer wishes to undertake. The main cost choice for insurers will be whether
they wish to pay a high price for investment and realise a relatively low operational cost,
or enjoy a low investment cost and endure a high operational cost after the standard is
implemented. The options around this are discussed in section 1 (page 16) and section 2
(page 19)
From a management perspective, good clarity of
strategic objectives will help focus the whole initiative
and prevent nugatory spend. If work commences
without clearly communicated precision, delivery teams
will act slowly in developing their proposals and
solutions. Moreover, work secured from suppliers may
be wasted and have to be undertaken a second time.

When Innovation started its research on IFRS 4 Phase

II we estimated that the cost would be approximately
US$8M for work within the parent company and
approximately the same within each country in which
the insurer operates (so for an insurer operating in 10
countries US$88M). In discussion with other delivery
firm in the last two years, many believe it will be higher.

Detailed cost planning should be undertaken for any

desirable options. In addition, we recommend
consideration of the following factors:

Innovation is currently undertaking a study and is

benchmarking costs within it. These results will be
released when the study is complete.

19

Scarcity of skilled resources and competition to

engage them at the same time
Amount of elapsed time required to do the work
(alternative is to procure off-the-shelf solutions)
Scale of the required organisational changes
Scale of the required business process changes
Scale of the required systems changes
Type of supplier contacts (fixed price versus time
and materials)
Number of jurisdictions in which the insurer
operates
Risk appetite, treatment of issues and key
decisions already identified in this paper

Innovation is currently undertaking a

study on the impact of IFRS 17 and
business readiness for it, focussing on
Investors, Insurers, Regulators and
suppliers to insurers.
To participate please go to:
www.innovation.co.uk

2. DELIVERING IFRS 17
MAJOR CONSIDERATIONS
Each insurer is going to rework its valuation and accounting processes. The insurers
approach to product development will change. New processes and models will be
required for closing the books and undertaking valuation. Current configuration of
organisations and systems will not suit an IFRS 17 environment, so these will have to
change too. For example, actuarial teams often reside separated from their accounting
colleagues, but IFRS 17 will place actuaries much closer, if not at the centre of
accounting processes. This will mean a much higher integration of teams, leading to
organisational changes. In addition, systems supporting the people and the processes
will also need to be reengineered.
These points lead to further questions about how much
and how far a business is prepared to go to undertake
changes. Most insurers do not prioritise investment in
their back-office operations, however there is a case to
use IFRS 17 as an opportunity to undertake corporate
house-keeping by aligning its accounting policies
across all its entities. Especially as, a post-IFRS 17
accounting and actuarial environment will be much
more operationally complex, therefore costlier, than the
current regime.
If the insurer chooses to pursue the minimum amount
of change to be compliant, they are likely to pay a
heavy operational overhead for maintaining the
minimum required standards. It will also face increased
operational complexity because of the increase in
volume and complexity of calculations.
If the insurer chooses to take the opportunity to
optimise its processes it will compete for scarce
resources with other insurers. For example, there are
currently about 65,000 practising actuaries in the
world, a common consensus is that the number of
required actuaries by 2022 could be 100,000.
Insurers also face a choice about how much support
they seek from outside organisations. Most large
accounting firms and consultancy firms offer expertise
in the accounting and actuarial approaches to the
standard. Others, such as Innovation are experts in
delivery. At least one major accounting firm has even
invested in training a large number of new actuaries in
anticipation of delivering the changes for clients.
Deciding what level of external intervention will be
required is a key decision in setting the insurers
delivery strategy. It may be tempting to do the work inhouse, but suppliers have been developing processes,

20

calculations, models and even systems for a number of

years. If chosen judiciously these will reduce both
investment and operational costs.
Consideration will also need to be given to when
outside support is used because insurers who
commission support late or at short notice are likely to
pay a heavy premium for quality suppliers such as was
seen in Europe during Solvency II implementation
between 2009 and 2011 when some specialists cost
50% more than they had in 2007.
The insurer will need to consider its approach to the
autonomy of each entity or country in its business. A
centralised approach is likely to be initially challenging
and complex. However, in the long-term, operational
efficiency will be improved in comparison to a solution
where each entity has complete autonomy. Included in
decisions around autonomy, will be the approach to
how journals report into ledgers and the difference
between central and local ledgers. The same
sequence of issues will be faced in considering models
whether to have centralised models, local models or
produce a core model with local shells.
IFRS 17 will not be developed in isolation. Regulators
in all countries are becoming more interventionist. Risk
based capital requirements (akin to Solvency II) are
being rolled out now and will continue into the late
2020s in many jurisdictions. Other IFRS changes are
coming too. The ones most likely to affect insurers are:

IFRS 9 Financial Instruments (2018, but deferred

to 2021 for most insurers)
IFRS 15 Revenue from Contracts with Customers
(2018)
IFRS 16 Leases (2019)

DELIVERY OPTIONS
After the strategic direction is settled (previously in section 1.6 How?) there will be
delivery options. This section discusses twenty common options available to insurers.
There will be a great deal more options and sub-options available to each insurer, but
their relevance will depend on the people, processes and systems the insurer currently
has, and those it intends to have by 2022. The earlier these are explored, the more likely
implementation of IFRS 17 will happen in a planned and controlled manner.
The workflow is illustrated on the next page (figure 6)
and discussed in detail thereafter. For this paper the
options discussed are:

Delivery options 1 to 5 - Decide workload balance

& volume of outsourced development (Table 5)

Delivery options 6 & 7 - Decide whether to buy offthe-shelf systems to fast-track delivery (Table 6)

Delivery options 8 & 9 - Decide whether to

outsource operational work either temporarily or
permanently (Table 7)

21

Delivery options 10 to 12 - Decide where the

elements of the work will take place (Table 8)

Delivery options 13 & 14 - Decide timing of

calculation actions for comparative and opening
balance sheet work (Table 9)

Delivery options 15 & 16 - Decide whether to

adopt early, on time or late (Table 10)

Figure 6. Breakdown of strategic and delivery options for IFRS 17

22

1. Develop in-house
and backfill
operational work

This approach could be dubbed The artisanal approach, where actuaries and accountants
make their own tools that they will subsequently use to deliver the operational work.
inconsequently when the process and the systems are operational, the users will understand
the challenges and be able to work continuous improvement activities.

The insurers employees will need to learn IFRS 17 before they can effectively design and
deliver the required changes. This means that the rate of development is likely to be slower
than in other organisations who use external support. In addition, developing the required
process, models and systems without external support risks missing optimum solutions
derived by external parties. In backfilling the operational work, insurers are more likely to be
able to retain key employees during the development of IFRS 17, but the cost of backfill could
be high. Backfill costs could be reduced by utilising agency / contract staff on short or fixed
term contracts.
2. Develop in-house
and dont backfill
operational work

As previous, except the following: In not backfilling operations, many actuaries and
accountants will have much increased workload. This will make working for the insurer less
attractive at a time when other insurers are likely to be offering premium job-offers to
prospective accountants and actuaries, especially those with IFRS 17 experience. This will
be especially bad for organisations who are lean.

3. Outsource
development work
and maintain use of
staff for operational
work

This is the type of approach used by organisations in manufacturing industries where there is
a high degree of separation between those who develop and those who manufacture the
goods. Insurers tend to be more artisanal, where accountants and actuaries often make their
own tools (based on frameworks from outside suppliers) and use them to deliver the
operational work.

This route does have many merits; It minimises the disruption to current operations; utilises
experts whose approach and insight would not otherwise be applied; benefits the client by
only paying for mature expertise (whereas internal people will be learning as they go along),
but leaves staff with minimal understanding of IFRS 17 and its mechanisms. Possibly also
leaves the insurer dependent on outsourced organisations who will have different priorities
and motives to the insurer.
4. Develop in
partnership with
suppliers and
backfill operational
work

A good number of suppliers to insurers have been developing technical and business
process solutions to IFRS 17. If chosen and managed carefully they could offer a good
service and minimise disruption in current operations

5. Develop in
partnership with
suppliers and do not
backfill operational
work

As the previous option except: Where work becomes unexpectedly high or difficult, there will
be two types of problem that can emerge. The first when operational work becomes
prioritised over the development work, meaning that the rate of development slows down,
and the project is delayed. The second is that an unscrupulous supplier sees complexity of
delays as an opportunity to exploit shortages at a high cost to the customer.

The risk that if not properly managed, the suppliers deliver what is best for the supplier, not
the customer. Use of several suppliers specialist in certain activities may treat this risk.
Backfilling operational work can be undertaken by agency or independent staff on short or
fixed term contracts. This would be significantly lower cost than compared to consultancy
staff.

Table 5. Delivery options 1 to 5 - Decide workload balance & volume of outsourced development

6. Buy off-the-shelf
models

23

A number of suppliers have developed Prophet or MoSes IFRS 17 valuation models. These
can be adopted by insurers and plugged in to the operational process, short cutting the
development time for key and complex areas of the process. The risk that the insurer

becomes dependent on the supplier to maintain and modify the models.

7. Buy off-the-shelf
accounting systems

There is at least one full accounting system on the market that has the required components
for the insurer to be IFRS 17 compatible, it is provided by SAP. There may be other systems
too. Changing accounting systems is a long-term and challenging process. All manner of
factors need to be decided, including data standards, version control and service
management. Backward-compatibility with legacy systems will be a key challenge.

A decision to change accounting systems should not be a hurried process. In addition,

changing systems in the critical period between 2017 and 2022 period will make managing
the back-office of the business more complex.
Table 6. Delivery options 6 & 7 - Decide whether to buy off-the-shelf systems to fast-track delivery

8. Outsource
operational work
temporarily

A number of insurers have outsourced their valuations to external suppliers. Conceptually

they could outsource their whole close process to a supplier as long as the audit and
governance requirements were fulfilled. In the short term, outsourcing of comparative
accounts could be very attractive for some insurers because it will reduce the pressure on
accounting and actuarial teams in the 2019 to 2021 periods. The option could also be used to
delay internal implementation of IFRS 17 if for example, there are other pressures on the
business (such as readiness, M&A activities or systems engineering issues).

9. Outsource
operational work
permanently

Elements of the process permanently ceded to an outside supplier would simplify the amount
of internal management required within an insurer Outsourcing will always be a double edged
sword, day-to-day costs become relatively fixed, but changes in service become costly.
Service standards tend to be low and responsiveness reduced. Despite the downsides it
does make management of the core business simpler and more predictable.

Table 7. Delivery options 8 & 9 - Decide whether to outsource operational work either temporarily or permanently

10. Local
development of the
standard

Allow each entity to develop their own ledgers and models in response to IFRS 17. This will
allow each entity to closely work towards perfecting local regulatory requirements. The
corollary of this is that an insurers entire accounting and actuarial process would become
fragmented with proliferation of duplication. It would be difficult to manage from a group
perspective. Audit would become expensive. Operational duplication would be rife. Once
operational it would be much more difficult for actuarial teams to be able to validate headoffice numbers where local anomalies occur.

11. Central
development of the
standard

Design, plan, manage and deliver IFRS 17 from a centralised location.The previous option
demonstrates the inadequacies of a localised approach. A centralised approach gives the
insurer the opportunity to resolve all these issues. However, a centralised approach can
throw up its own problems entities will be subject to different details in the standards,
meaning that there will be local nuances. To attempt to control and tie all of these distinctions
down at a central point would most likely be counterproductive when expertise is locally
based.

12. Develop some of

the solution centrally
and some locally

This option is a hybrid of options 13 and 14. It recognises that there are merits in central
working and local working. Strategy, planning and design is easier when members of a team
are co-located. This will suit most insurers because they have corporate accounting or
actuarial solutions. Nevertheless, some activities such as detailed adjustment of models may
be best handled locally. This option recognises these compromises. There exact split will
depend on how complex and fragmented the insurers organisation, processes and systems
are.

Table 8. Delivery options 10 to 12 - Decide where the elements of the work will take place

24

13. Produce
comparative
accounts
concurrently

Comparative accounts are usually more easily done at the time the original accounts are
created because retrospective accounting and disclosure creation can be troublesome. In
addition, it can be difficult to devise useful commentaries when time has passed.

The disadvantage of contemporaneous production of comparative accounts is twofold. First it

requires the IFRS 17 process to be in place and operationally functional by the time the
comparatives are undertaken (noting the need for an opening balance-sheet position). This
means to do this an insurer would have to have in place the ability to convert data at the end
of 2019 for the opening balance sheet. Second, the processing of the accounts would
require a doubling up of effort. Assuming that most businesses are run in a lean manner, this
would require extra resources.
14. Produce
comparative
accounts
retrospectively

In producing the accounts retrospectively, the insurer has the opportunity to delay completion
of its business process design and modelling. The disadvantage of this option is that because
the work is done retrospectively it would be difficult to understand or correct surprising
outcomes.

Table 9. Delivery options 13 & 14 - Decide timing of calculation actions for comparative and opening balance sheet work

15. Adopt early

Early adoption of the standard is allowable. It is advantageous to any insurer because it will
give it a much greater amount of time to understand and explain the changes in the balance
sheet to its investors. It may also be advantageous to a business that it discovers that its
position is actually improved by IFRS 17, or that investors view of the business is actually
improved.

Comparative accounts would be required; so very early work would be required to enable to
business to re-engineer its processes to be able to accomplish early adoption. It is likely that
such a delivery would require off-the-shelf solutions and a great deal of external support.
16. Adopt late

Some insurers have been lobbying hard to delay the standard further. It is likely that they
have assessed their businesss capability and believe it will not be possible to be compliant in
time. Even a small delay might help some businesses if it were possible because they could
benefit from suppliers learning experiences at other insurers.

In some cases, it would be possible for some or all entities within an insurer delaying. The
route to enabling a delay lies in each companys accounting reference period. For most
businesses it is January to December, making the first scheduled annual report for IFRS 17
in December 2021. If an insurer moves its accounting reference period prior to 2021, then it
may be able to delay 1 month, for every month it shifts with a maximum delay of 11 months.
All manner of legal issues would have to be resolved, some national regulators would not
allow it, an insurer would probably lose credibility in doing it and it would be very costly.
Table 10. Delivery options 15 & 16 - Decide whether to adopt early, on time or late

25

ESTABLISHING A PROGRAMME TO DELIVER IFRS 17

This section discusses the kind of structure that would
support successful delivery of IFRS 17. Before
discussing the structure, we at Innovation believe it is
essential to table our view that the management of
change is best undertaken people whose expertise is
in delivering change. Subject-matter-experts in
particular elements of the standard are an essential
part of the decision-making structure. However,
planning and management of the change is best

undertaken by people who have no solution bias and

whose primary skill is in planning and managing the
process of change. It is the responsibility of these
people to empower subject-matter-experts to make the
right decisions at the right time. Based on the
challenges already discussed and Innovations work on
IFRS 17, we propose splitting the work in nine
workstreams:

Figure 7. The proposed nine IFRS 17 workstreams shown in proportion to the overall workload

It is immediately obvious that there are no separate

accounting and actuarial workstream s. As already
discussed, the IFRS 17 operating model will require
accounting and actuarial activities to become highly
integrated. Consequently in a post-IFRS 17
environment, there will be no justification for such
demarcation in the financial management process.
Workstream s 1 and 6 are important because a large
number of internal stakeholders will find the process of
change an awkward experience. The actual shape of
the emergent organisation should be driven solely by
the target-operating-model (TOM); this would be
developed in workstream 4. Two of the work streams,

26

4 and 5 may benefit from being further broken down

into smaller component parts.
The structure illustrated in figure 7. does not account
for the complexities of businesses operating
internationally. Most insurers will operate in many
countries, so each business will need to take a view on
what proportions are undertaken centrally and what
proportions are delegated to local entities. At
Innovation we have developed a full understanding of
the structure. We have developed a detailed delivery
management structure on this basis and are in a
position set it up and deliver it of clients so wish.

PROGRAMME WORKLOAD OVER TIME

The total workload will pick up at the start of 2017 and
complete by early 2022 when the first annual
statements are made. Peak workload years are likely
to be 2018 and 2019.

Figure 8. Estimated programme workload over time.

27

Each insurer will different numbers of entities in

different countries and different sizes of workforces so
here we provide an estimate in proportions.

DELIVERY SCHEDULE AND ROAD MAP

Anticipated full implementation of the IFRS changes expected to be 1 January 2021 so
most businesses will be required to complete their first IFRS 17 annual close in
December 2021. Comparative data and opening balance sheet work will be in operation
from January 2019 it is likely that investors and the wider market will start to request
relevant information about the insurers position on IFRS 17. Insurers have 2 years to get
its operating model right and 4 years to get its systems implemented and fully
operational.
An approximate timeline for the programme is shown
on the next page. There are likely to be four major
planning issues that will shape the schedule:

There is rarely appetite to invest in back-office

functions.
Teams leading the change will find it challenging
to justify to their board the high levels of required
expenditure (some estimates are that for larger
businesses the combined cost of delivering IFRS
17 could be US$100 million).
Company boards may wish to take time over
considering such large investments. This risks
delay in start dates. The degree to which there is
an appetite to use the change as an opportunity to
deliver fundamental re-engineering of how the
finance functions within an insurer operate. Some
insurers will use this as an opportunity to align
their accounting policies and integrate their
organisations. Others will de-risk the project by
placing a moratorium on strategic change during
this period. The schedule will change accordingly.

There is a shortage of skilled staff to do the work and

probably not enough people to ensure the insurers
The actual scale of the technical implementation will
depend on the TOM and the current systems
compatibility and adaptability, and is currently
unpredictable. The illustration below does not show in

28

have all the people they need. This is especially true of

actuaries, there are about 65,000 actuaries worldwide,
yet with the implications of IFRS 17, we would
reasonably expect the requirement to exceed 100,000
by 2021As a result schedules may be in part
determined by availability of resources.
IFRS 17 is not something that has been done before.
Very few people world-wide have spent time working
on the subject, so many newcomers are required. They
will take time in learning the practices and the culture
of the organisations.
Innovation is aware some insurers have already
started this work and that others havent. The risks
associated with going early, or delaying are discussed
in elsewhere and shall not be repeated here. However,
we recommend that work commences as early as
possible to ensure that businesses understand the
strategic implications of their decisions and that work is
planned, controlled, predictable and orderly. This
means creating awareness and undertaking gap
analysis now. It will enable insurers avoid incurring
incremental cost later.

detail the various technical and business

implementations. They can be approached in a
traditional way, an agile way or as a mixture.

PROGRAMME SCHEDULE

Figure 9. Illustrative IFRS 17 programme schedule.

29

ANTICIPATED ISSUES, RISKS AND OPPORTUNITIES IN

DELIVERING IFRS 17
A large number of issues, risks and opportunities have been hinted at or discussed in
detail elsewhere. This section briefly discusses the biggest issues, risks and
opportunities

ISSUES ASSOCIATED WITH DELIVERY

ISSUE
1 Resource
availability

All institutions will be committing to do this work at about the same time. There is already
a shortage of actuaries in the world and also a shortage of project managers with
insurance experience. IFRS 17 will exacerbate this situation. Innovations experience of
the Solvency II peak where programme managers cost 50% more because of high
demand.

2 Alignment with
local reporting
standards

There will be differences in each country both in terms of product/policy and local
regulators detailed requirements

3 Level of
information flow
from Actuarial to
Finance will
massively increase

Up to sixty line items of reporting will be required

4 Analysis of
profitability profiles
and modelling of
potential outcomes

Early analysis of the profitability profiles will help understand what the information gaps
are

5 Conflicts with
Solvency II and
other risk-based
capital reporting
requirements

It may be possible to lever benefits from SII, but there are significant differences such as
contractual service margin, presentation and disclosure requirements and transition

Table 11. Issues associated with delivery

30

RISKS ASSOCIATED WITH DELIVERY

RISK
1 Unexpected
valuation changes
lead to different
profitability profiles
that shock
investors

2 Commit too late

If the new reporting regime causes a big shift and recalibration in risk / liability / P&L, then
this could have a major impact on the businesss market perception. Companies who do
not communicate well may find the market against them.

Scarce resources with become even more scarce. Consequently, prices will rise as quality
people become ever more in demand.

3 IFRS 17 TOM
design isnt
satisfactory

Despite a new model, old or bad practices continue

4 Much duplication
of work in each
country

Even though IFRS 17 is a standard, the detailed outputs in each country will be slightly
different. This results in high costs and workload

5 Resistance to
change

Not all stakeholders buy into the change of P&L reporting from current to forecast. It is
likely that there will be a period of resistance to the concept of the changes by some
stakeholders.

6 Major M&A
disrupts
development

M&A activities are disruptive to business and back-office management. It can take a
decade to align organisations, processes and systems. Adopting a pre-existing business
during the IFRS 17 development period will make delivery costly and challenging

Table 12. Risks associated with delivery

31

OPPORTUNITIES BUSINESSES COULD CHOOSE TO TAKE IN

DELIVERING IFRS 17
OPPORTUNITY
1 Lever commercial
advantage

As with all new regulatory regimes, IFRS 17 will give every insurer the opportunity to
lever how it implements the standard to increase market advantage

2 Alignment of
accounting policies
in different entities

Many insurers have grown by acquisition. When organisations are merged into the
new parent, they often retain legacy methods and processes. This makes the act of
closing books more complex than it would be if all policies, methods and standards
were aligned

3 Implementation in
multiple countries

Undertake a pilot in lead countries and roll-out progressively, learning lessons and
making improvements on the way

4 Some benefits may

be drawn from
Solvency II and Risk
Based Capital
reporting

It may be possible to lever some benefits from SII work but there are also significant
differences such as contractual service margin, presentation and disclosure
requirements and transition

5 Find out early the

technical challenges

The technical challenges will need to be defined, some are universal, and many are
unique to each company. Getting an early view will allow key decisions to be made in
an orderly and timely way

6 Improve the
business processes

Taking those opportunities could be factored into the programme and achieved at the
same time

7 Organisational
opportunities

The new way of working will give rise to a number of opportunities to change or
renew how people operate in the affected areas.

8 Systems
opportunities

Systems changes will be inevitable. Often the approach by businesses is to modify a

number of systems independently. If planned far ahead, the costs could be invested
to generate a strategically advantageous outcome.

Table 13. Opportunities businesses could choose to take in delivering IFRS 17

32

NEXT STEPS FOR INSURERS

There are over 200 factors that each insurer will have to consider before it commits to a particular delivery path. Every
insurer will then have additional issues and challenges of its own that it will have to face. All of these factors need to be
recorded and understood to make good decisions that will lead to robust and low risk delivery. This section summarises
the strategic actions that should be undertaken now to support that work.

NEXT STEP
1 Start to understand
the investor
implications of the
change.

There is a risk that investors will respond negatively to the impact IFRS 17 has on
your business. Model the changes in todays balance sheet and perform a gap
analysis as to how investors might respond

2 Communicate the
need for change

Creating awareness of the need for change is the first step to enabling the change to
be delivered. Communicate the strategic need for change and invite comment and
views from the affected user population.

3 Understand what
needs to change

Early gap analysis will allow the business to begin to understand the scale of
potential changes and kick-off the planning cycle. Make decisions about what
opportunities you wish to take to align your accounting policies, reduce complexity
and optimise your organisation.

4 Table key issues and

decisions

Strategic decisions take a long time for experts to work through. Identifying key
decisions early will allow the process of debate and investigation to commence.

5 Assess strategic fit

IFRS 17 will be one of a number of programmes undertaken over the next 4 years.
Many will have interdependencies and some may negate or duplicate each other.
Assess IFRS against all other strategic initiatives and assess constraints,
dependencies, assumptions, clashes, pinch-points and duplications.

6 Identify delivery
options

There are always many different ways of delivering a set of outcomes. Create a list
of all the delivery options use our template to speed the process up and add extra
options unique to your business. Prioritise what is more is more important low
investment cost or low operational cost

7 Set up a team to do
kick off the work

This work has to be done. It would be better done before it becomes urgent and
resource availability becomes an issue. Decide whether there is the capability and
capacity to do the work wholly in house or whether some or all of it is contracted out.

8 Commence the act of

planning the full cycle
of the work

Plan the implementation of change in detail. Build a basic framework for the end-toend process of change. The information provided in this paper should enable you to
do this.

Table 14. Next steps for Insurers

33

3. INNOVATION IS DELIVERING IFRS 17

Innovation Business Vision is a company that delivers change in large businesses.
Innovation offers one service we supply people who are great at defining and delivering
change. We can support internal teams at insurers and manage external suppliers.

INNOVATION IFRS 17 CAPABILITIES

Innovation currently has staff delivering IFRS 17
projects for insurers in Asia and Europe.
Our people are experts in supporting large
organisations in shaping and planning complex
business change we consider these skills core to the
project management skill set

and senior business users to define, plan and deliver in

financial services. These people, whilst are not experts
in IFRS, are experts in enabling subject-matter-experts
to do the work productively and cost effectively. This
reduces overall cost, complexity, pressure and timing
of the work.

We have expert project and programme managers

who are exceptional at getting actuaries, accountants

INNOVATORS
We are powered by our people; we call them
Innovators. Innovators are people who share our
values and have the experience and ability to serve
Innovations customers well. Because Innovation is
solely concerned with delivering change, we have high
standards for people in these subjects. Our people are
rounded, they have a wide range of management and
delivery skills they get their hands dirty and they
have done it successfully over a number of years.
Our staff are a mixture of employees and independent
consultants. The independent consultants are usually
very senior, with decades of experience and enjoy the
challenge of working in different business
environments. Many of our independent consultants
have worked with us for over a decade. This business
model allows Innovation to be lower cost and have a
flexible approach to our customers. Three key features
that differentiate Innovation from bigger and more
general consultancies are:

We only supply the kind of people the client

requires NOT whoever we have available.

We do not swap out senior people for more junior

people once a job has started.

Customers do not pay for large operational

overheads implicit in charges made by big firms.

Innovation has a good roster of project and programme

managers. We rate our people according to an
assessment system that demonstrates their abilities
relative to our clients needs. We ensure that we only
supply great people to our clients by undertaking
extensive selection analysis prior to proposing a
particular individual to the client. If the client can
articulate what they need concisely then we can
identify suitable Innovators or search externally for
people who will add value.

INNOVATIONS INSURANCE CLIENTS

AIA

Prudential Corporation Asia

Aviva

Prudential GHO

Direct Line Group

Prudential UK

Friends Life

PruHealth

Just Retirement

Sedgwick

Legal & General

Swiss Re

Manulife

Willis Towers Watson

Mercer

Zurich Insurance

34

INNOVATIONS APPROACH DELIVERING CHANGE IN

BUSINESSES
We believe that a business has three components people & culture, business
processes and systems & data.
The purpose of the people is to do the business. The
processes are there to provide quality, consistency,
continuity, guidance and support to the people doing
the business. Systems are put in place to support the
people and improve the processes. Modern

businesses have a near total integration between the

three. Culture is the manifestation of a businesss
values that drives its brand projection; and data is the
major asset managed by the systems and if used well
can improve capability

DELIVERING CHANGE THAT WORKS FOR THE WHOLE BUSINESS

Any business undertaking a programme or project will
be undertaking business change whether or not it is
IT based. The impact will be felt elsewhere in the
business. Successful programmes and projects
acknowledge this and factor in potential positive and
negative impacts.
The challenge in realising this philosophy is that most
people who call themselves project managers or

35

programme managers are subject-matter experts in a

particular field. They are not what we call 'rounded'.
We believe that to be a great project or programme
manager you need to be able to empower the subjectmatter experts in all three areas so that the change
can be planned and delivered in accordance with the
mandated requirements. In other words: achieve the
right outcome for the business.

THE SHAPE OF PROJECTS

A project is a piece of work that changes the state of some aspects of a business and its
content (people & culture, processes and systems & data).

Each project needs to deliver outcomes that support

the businesss overall strategy and are managed in a
structured way.
The art of project management is to define, plan,
deliver and transfer the outcome of the project into
business as usual. The total project management
activities for each project are represented in the
adjacent diagram.
All too often businesses see project management as
an administrative task when work is being delivered. At
Innovation we argue this is why so many projects fail to
deliver their mandated objectives. Projects should be

36

managed by people with seniority and experience in

proportion the importance of the project.
A programme is a cluster of projects that come
together to deliver a strategic shift in a business. They
often share common methods, standards and
techniques. Teams of experts may work on several
projects within a programme.
In a programme context PMOs or Innovation Delivery
Centres can take up much of the work of the project
team thus reducing overall workload and bring a
common work method across a range of projects.

Figures and tables

Figure 1. Workflow of the decision-making process to enable IFRS 17
delivery. P 5

Table 7. Delivery options 8 & 9 - Decide whether to outsource

operational work either temporarily or permanently. P 24

Table 1. Comparison of one companys performance using different

accounting standards. P 6

Table 8. Delivery options 10 to 12 - Decide where the elements of the

work will take place. P 25

Figure 2. How asking seven basic questions planning and delivery of

change. P 8

Table 9. Delivery options 13 & 14 - Decide timing of calculation actions

for comparative and opening balance sheet work. P 25

Table 2. Drivers for, and in delivering IFRS 17. P 10

Table 10. Delivery options 15 & 16 - Decide whether to adopt early, on

time or late. P 25

Figure 3. A generic view of an insurance companys accounting and

valuation process. P 11
Table 3. An insurers stakeholders in IFRS 17. P 13
Figure 4. World map of expected IFRS application in 2021. P 15
Figure 5. Major milestones for IFRS 17. P 16
Table 4 Strategic options for delivering IFRS17. P 17
Figure 6. Breakdown of strategic and delivery options for IFRS 17. P
22
Table 5. Delivery options 1 to 5 - Decide workload balance & volume
of outsourced development . P 23
Table 6. Delivery options 6 & 7 - Decide whether to buy off-the-shelf
systems to fast-track delivery. P 24

37

Figure 7. The proposed nine IFRS 17 workstreams shown in

proportion to the overall workload. P 26
Figure 8. Estimated programme workload over time. P 27
Figure 9. Illustrative IFRS 17 programme schedule. P 29
Table 11. Issues associated with delivery. P 30
Table 12. Risks associated with delivery P 31
Table 13. Opportunities businesses could choose to take in delivering
IFRS 1. P 32
Table 14. Next steps for Insurers. P 33

38