Insurance operators in the nation have stated their readiness for the full adoption of the new reporting standard in the nation as underwriting organizations around the world get ready to transition from International Finance Reporting Standard (IFRS) 4 to IFRS17 by the implementation date of 2024.
The International Accounting Standards Board (IASB) produced IFRS 17 (formerly known as IFRS 4 Phase II), an International Financial Reporting Standard that introduces new guidelines for disclosing profit emergence from insurance contracts and is initially slated to go into effect on January 1, 2023.
Raphael Akomolede from Leadway’s Finance Department discussed the new IFRS 17 at a one-day workshop for journalists organized by Leadway Assurance 2023 Training in Lagos. He said the implementation of the IFRS 17 current standard will aid users of accounts in making reasonable comparisons between companies, their past performance, current financial position, and risk exposure not only in Nigeria but also internationally.
The insurer has finished solution design, which addresses 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, according to Akomolede, who also provided insight into the firm’s position regarding the implementation of the IFRS 17.
According to him, the relevant divisions of the company are currently working on transition disclosure, interim IFRS 17 compliant financial statements, and system testing and implementation (before and post). They are also reviewing and producing financial positions for 2021 and 2022.
Speaking about the issue with the soon-to-be-replaced IFRS 4, he claimed that the IFRS 17 replaces the interim standard that permits insurers to use regional generally accepted accounting principles (GAAP) to measure insurance contracts; there is no single method to account for insurance contracts; and current accounting makes it difficult for investors to determine which groups of contracts are profitable and which are not.
He asserts that IFRS 17 will have the following effects: improved comparability for the first time; current and accurate measurement of insurance contract liabilities; a more understandable presentation of financial performance and position; increased disclosure and transparency; and a clear separation of insurance activities from investment activities.
The National Insurance Commission (NAICOM), he said, has been working diligently since 2019 to ensure the full adoption of IFRS 17 in the Nigerian insurance business. He praised NAICOM for the Roadmap for the implementation of IFRS 17 for the industry in Nigeria.
Speaking on “Breaking Down the Power of Synergy,” Joshua Ogbeifun of Leadway Assurance’s Strategy and Special Project Department emphasized the company’s strategy for advancing its goal of remaining the leading insurance provider in Nigeria in terms of revenue and profit market share within the corporate and retail market segments.
According to him, the company is concentrating on transforming into a customer-centric organization with an effective sales process and structure. Leadway is looking to work with companies that have the reach it needs by offering data-driven consumer insights and customer-led solutions.
Ogbeifun further stressed that low penetration is a significant concern for the sector and emphasized the need for stakeholders to play their part in boosting consumer adoption of insurance.
Ogbeifun said that while Nigeria’s insurance penetration rate of 0.3% indicates that the nation is underperforming, something needs to be done jointly.
He urged regulators to establish an effective regulatory framework while promoting the simplification and personalization of insurance products and services to satisfy the needs of the public that purchases insurance.
