IFRS 17 - TECHNOLOGY SOLUTION – THE RIGHT STRATEGY FOR DATA
14 June 2021
This is the fifth in a series of seven articles.
By now, most insurers have established an IFRS 17 implementation plan and are working on the design of their solution. This article outlines how the right data strategy for IFRS 17 can be extended across the enterprise to advance an insurer’s data maturity rapidly and cost-effectively leveraging the investments in IFRS 17 as a foundation.
In working with many IT leaders on IFRS 17, we recognize that adoption of the new standard poses many issues for insurers, including:
- Significant data connectivity asks are being made to fulfill the requirements of IFRS 17.
- Quick decisions on the cloud may be required as many IFRS 17 accounting engines are only available in a cloud model.
- A complex mix of current and legacy infrastructure presents challenges for IT teams.
- Considerable differences between insurers in terms of where they are on the data maturity spectrum.
Despite these challenges, the data advancements required for IFRS 17 are often the right advancements to apply to the overall enterprise. This includes the following benefits:
Data as an asset
- The value of the data for most IFRS 17 implementations is high given the significant footprint of policy, claims, financial, investments, and reinsurance data residing in a variety of source systems. Establishing the right single source of the truth for the IFRS 17 dataset can naturally become the right single source of the truth for the enterprise.
Agile data integration
- IFRS 17 often requires a significant investment in data integration because of the broad impact across the technology and data landscape. Those who combine the integration needs of IFRS 17 with the integration needs of other business objectives can achieve economies of scale by leveraging the same integration strategy and platform.
- IFRS 17 presents a catalyst opportunity for IT to move away from a legacy point-to-point approach and adopt a modern hub approach. This enables not only the data connectivity for IFRS 17, but also sets the foundation for data maturity advancement and advanced analytics outcomes by leveraging the potential of AI.
Business intelligence and advanced analytics maturity
- Given the rich dataset required for IFRS 17 and the financial and management reporting requirements, it’s a great opportunity to leverage the business intelligence and advanced analytics used for IFRS 17 for the enterprise.
Data governance and literacy maturity
- The pragmatic data governance and data operations strategy required for IFRS 17 can be applied as the gold standard for other high-value data sets across the organization.
- The data literacy and education approach for IFRS 17 is often the same approach for advancing an organization’s data literacy overall.
- The deadline for IFRS 17 compliance is rapidly approaching, making it crucial for insurers to examine and act on their compliance plans sooner rather than later. The question for most insurers now is: will they simply create a minimum viable product or will they seize this opportunity to truly transform their business and take a market leadership position?
BDO has established a data platform accelerator for the insurance industry known as InsurHub to meet the data needs of IFRS 17 and establish the foundation for enterprise data advancement. It leverages the Microsoft Azure data platform and contains fundamental best practices to be the gold standard for pragmatic data governance and operations.
InsurHub can help accelerate the path to IFRS 17 compliance and establish the foundation for enterprise data advancement. The InsurHub accelerator shortens the timeline of IFRS 17 implementations with a library of data connectors, a data lake repository aligned with the requirements of IFRS 17, key financial statements and management reports, and a collection of advanced analytics models. It contains fundamental best practices to be the gold standard for pragmatic data governance and operations.
This article was originally published HERE.