Complying with upcoming IFRS 17 and LDTI standards will entail many changes for insurers – including new valuation approaches for contracts and substantial changes in basic financial reports. Using a comprehensive, governed platform that runs in a trusted cloud environment is a way to adapt quickly while unlocking business value from these regulatory reporting requirements.

What’s required for success?

Both IFRS 17 and LDTI will have a significant impact on financial performance, operational processes and data. To support new processes, insurers will need new actuarial calculations, a new structure of accounts and key performance indicators. Accounting and reporting systems must evolve to accommodate these changes.

One key to success is an integrated environment for managing, auditing and tracing all steps of the IFRS 17 or LDTI compliance process. Ideally, this integrated approach will be based on an open and scalable platform that runs in the cloud.

4 tips to help insurers address the challenges

Insurers are not starting on a green field, of course. All must work within the constraints of processes and systems that are already in place. Starting with what you have is the first of four suggestions to help ease the challenges of compliance.

Tip 1: Integrate risk and finance analytical frameworks

One way for insurers to ease compliance efforts is to implement an analytical framework that integrates risk and finance functions. Consider connecting existing underlying technology components with various business components that also share functional capabilities and data.

Such an integrated framework approach provides a single source of data for both risk and finance calculations, as well as more specific calculations. In addition, it ensures consistency in common data, enables comparability of data, and eases reconciliation of results. The result is closer collaboration among actuaries, finance and IT. This is especially relevant to reporting of expected and actual cash flows and metrics.

Tip 2: Orchestrate processes

When multiple departments are involved in such a time and resource-intensive task, it’s crucial to orchestrate and optimize processes. Both IFRS 17 and LDTI require managing risk and financial data. This includes data collection, aggregation and allocation for the calculation of IFRS 17 or LDTI measures and the creation of accounting entries and disclosures. Imagine the benefits of being able to run the entire process − from data sources to reporting − within a single, integrated platform that is centrally managed and traceable.

Tip 3: Establish a dedicated flow for insurance contract accounting

Another challenge of compliance is dealing with subledger functionalities. This is especially an issue for actuaries who weren’t routinely exposed to accounting before the IFRS 17 and LDTI standards came into play. Ideally, insurers need to establish a dedicated flow to support the detailed insurance contract accounting process. This could be on a standalone basis, or embedded in the end-to-end financial closing process.

Aim for a flexible development logic that connects calculation and accounting processes and can adapt to changing business requirements. It’s important to enable process owners to review and amend prior to general ledger postings. And be sure to consider generation of pre-posting reports, aligned with your firm's accounting system, that support multi-GAAP and multicurrency reporting.

Tip 4: Plan to report across locations, lines of business and currencies

Many insurers have subsidiaries in various locations in addition to their headquarters. This creates the need to localize reports for individual subsidiaries so they will reflect appropriate currencies. Aggregated firmwide results must also be made available across geographies, currencies and lines of business. And the implementation date for IFRS 17 is not the same in all countries. Don’t overlook these reporting needs as you plan for IFRS 17 and LDTI compliance.

Getting started with cloud: Improved calculation performance, cost efficiency

Insurers globally are working to address IFRS 17 and LDTI regulations that demand increased financial transparency and a better understanding – and reporting – of how insurance contracts affect their finances and risk. SAS helps solve these challenges, from accounting for insurance contracts to establishing a structured workflow process to integrating risk and finance calculations.

Our approach streamlines the flow of information and reporting of expected versus actual cash flows for all stakeholders. In turn, insurers can track results and metrics in a timely way, while addressing regulatory requirements and fostering collaboration.

Looking to the future

With the SAS Cloud solutions on Microsoft Azure, insurers are positioned to unlock even more business value from their regulatory reporting requirements. Our comprehensive analytical platform is designed to help users work together across multiple disciplines, including actuarial, finance and IT. And robust, built-in data management capabilities ensure data traceability at granular levels of detail.

Beyond short-term benefits, our cloud-based platform gives insurers flexibility to scale more broadly than ever. Now it’s possible to support business activities other than just actuarial analytics and other insurance risk requirements – going beyond the demands of regulatory compliance and financial reporting standards. For example, insurers can use a cloud-based approach to address IFRS 9 and CECL compliance, stress testing and sensitivity analysis. This is truly a way to prepare for the uncertainties of the future.

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About Author

Thorsten Hein

Principal Product Marketing Manager

Thorsten Hein is a Principal Product Marketing Manager in the Risk Research and Quantitative Solutions Division at SAS Institute. He specialises in global risk management operations insights in both banking and insurance, focusing on risk and finance integration, IFRS, Solvency regulations and regulatory reporting. He helps risk management stakeholders to go beyond pure regulatory compliance and drive value-based management to maximise business performance, using his wide experience to deliver both business relevance and technical coherence.


  1. I am very happy to join the Community of SAS. Itreally useful to read some tips to insurers address the challenges.

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