9th Mar 2022, By Noman Zafar
Insurance companies in the Gulf Cooperation Council (‘GCC’) region have been working towards alignment with IFRS 17 (the ‘Standard’) for over three years now. This process to date has been largely organized and controlled by the local regulators that initially set out a common broad approach. The pace of execution, however, has been varied in terms of priorities, timelines, submissions and the level of detail, process- and system-related aspects, user-testing, dry runs and the level of stakeholder involvement.
The Saudi Central Bank (‘SAMA’) is in the forefront and well on its way to plotting an early learning curve for the KSA insurance sector with the second dry run due by 31 May 2022 for the financial year ended 31 December 2021. Alongside, most insurers have commenced system integrations and other process-related changes. In addition, the regulator has also outlined a detailed scope of work for external auditors to ensure a seamless and well-tested transition.
Likewise, the process appears to be gathering momentum in Bahrain with the first dry run due by 14 August 2022 for the six months ended 30 June 2022.
United Arab Emirates
In contrast, the Central Bank of the UAE has suggested a dual reporting framework. While IFRS 17 will be adopted for general purpose accounting with effect from 1 January 2023, regulatory reporting (for solvency) will continue via the current eForms and gradually align with IFRS 17 in due course. Apart from the third (more comprehensive) Financial Impact Assessment (FIA) due by 31 March 2022 for the financial year ended 31 December 2020 and quarterly progress updates, dry runs have not been mandated and insurers are generally navigating the implementation process with the support of consultants.
Rest of GCC
Elsewhere, further instructions are awaited from the Capital Markets Authority in Oman while progress in Kuwait and Qatar remains largely market-driven.
With just three quarters left to the ‘go live’ date of 1 January 2023, the transition to IFRS 17 is now a pressing priority for insurers.
TRANSITIONING TO IFRS 17: Some key decisions for insurers
In this two-part series, in partnership with Insurance Monitor, we delve into two key actuarial assumptions when transitioning to IFRS 17. These assumptions and the choice of methodologies thereof are key decisions for insurers that influence how profit from insurance contracts emerges and is reported over time:
Part 2, available on the Insurance Monitor website, covers the following:
Click here to download the report for free.
Subscribe to our newsletter
To receive your quarterly updates.
By completing this form you are opting into emails from Lux Actuaries. You can unsubscribe at any time.
© 2022 All rights reserved.