Insurance Risk Systems for IFRS 17 and LDTI Compliance, 2020: Market Update and Vendor Landscape

In 2019 Chartis published a series of research reports on International Financial Reporting Standard (IFRS) 17 compliance. We focused on demand among insurers for IFRS 17 compliance solutions, and considered the technology overlaps between these systems and those for other accounting standards and solvency regimes. We see IFRS 17 as part of a wider regulatory project to integrate risk into accounting practices, in line with other areas of financial services and their accounting regimes (notably IFRS 9 and Current Expected Credit Losses [CECL]).

In this report we consider insurers’ evolving technology requirements for compliance with IFRS 17 and its US counterpart LDTI. Insurers’ approach to compliance will be shaped largely by the type of product(s) they sell and their existing technology. In addition, since IFRS 17 is a global standard, there are significant regional dynamics at play, and the regulatory and reporting environment in which institutions operate will have a significant impact on their compliance strategies.

As part of our analysis we also examine the core principles of LDTI, and the main areas in which it differs from IFRS 17. Because many insurers do business across regions and reporting regimes, we also consider the climate of multi-GAAP reporting, which requires multinational businesses to comply with different accounting regimes simultaneously.

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