IFRS17

The IFRS 17 standard

After 20 years of preparation, on 18th of May 2017 a new international standard concerning insurance contracts, IFRS 17, was published. The goal of this new standard is to provide better info on insurance companies’ financial state and profitability by creating more transparency and enhancing comparability between financial statements.

IFRS 17 standard differs from Solvency II which leads to underwriting reserve amounts being differentiated. IFRS 17 standard unifies accounting of insurance liability in insurance contracts, which implies that national manners of calculating it are no longer compliant. In IFRS insurance contract liability is to be calculated as the present value of future cash flows with a provision for risk.

IFRS 17 will replace IFRS 4, which was published in 2004 and was intended to be a temporary standard. IFRS 17 has an effective date of 1st of January 2021.

The Tagetik IFRS 17 solution

Because IFRS 17 will be a mandatory part of insurance companies’ reporting requirements, it will influence operational costs, KPI figures and forecast reports. This means that insurance companies might have a difficult and expensive process of rebuilding financial managerial processes, solutions and workflows ahead.

CCH Tagetik IFRS reporting software has an automated compliant solution with the expanding features (e.g. Solvency II). With CCH Tagetik IFRS 17 solution you can focus on your core business while relying on being compliant with regulations. CCH Tagetik offers a set of solutions (e.g. Solvency II, IFRS 9, IFRS 15, IFRS 16 and IFRS 17), which are available as a cloud based or an on-premise solution making sure, that in all circumstances your business remains its compliance.

The CCH Tagetik IFRS 17 solution consists of the following features:

The IFRS 17 calculation engine

CCH Tagetik IFRS 17 helps you to be compliant by following the new models of insurance contract accounting. CCH Tagetik calculates liabilities for remaining coverage (LRC), liabilities for incurred claims (LIC) and contract service margin (CSM). CCH Tagetik discounts (alkuperäisessä virhe: alentaa > diskonttaa) future cash flows, calculates risk adjustment (riskimukautuksia) and CSM. Calculations are performed on all portfolio levels or on preferred aggregation level to determine CSM and to perform laborious contract tests.
With CCH Tagetik solution organization gets a data model, which is built in compliance with IFRS 17 standards. Solution covers IFRS 17 compliant account chart and a custom data model to calculate every single elementary amount. CCH Tagetik offers modelling tools, integrated data model and calculations to suit your company’s needs. Creating custom configurations is simple with a user interface made specially for financial needs, which means that maintenance required from an IT department can be minimized.

Pre-configured solution

Integrability

CCH Tagetik IFRS solutions do not interfere with other existing architectures, instead they can be integrated in all your systems e.g. CCH Tagetik CPM solutions and solutions from other vendors, whether solutions are cloud or on-premise based. With CCH Tagetik ETL features you are able to integrate seamlessly with any other data source you want data to be imported from or exported to.
To comply with the IFRS 17 requirements, CCH Tagetik IFRS 17 solution has a data repository for insurance contracts. With the unified solution architecture CCH Tagetik provides you can calculate, report and reveal underlying risks and minimize their effect on your business. CCH Tagetik integrates seamlessly with Microsoft BI and Qlik Sense solutions, so you can easily analyse and drill down to the lowest level of data. When you trust that the numbers are accurate, you can use more of your valuable time on analysis and planning, how to develop your core business to be more competitive.

Insurance contract data mart

Modelling and calculation engine

With the power of CCH Tagetik’s calculation and analytics engine you process and calculate vast amounts fast. Flexible modelling helps you to ease the process of defining calculation logics and rules from the point of view of the financial department and remain compliant to IFRS standards.
With CCH Tagetik’s unified solution and Collaboration Office tools, organization has all the tools it needs to create and publish statements required by IFRS 17. Whether you present your statements to CFO and company board in PDF or MS Word format or give a PowerPoint presentation or an submission to regulators, you can remain confident that the figures and narratives are correct and auditable.

Disclosure and reporting