Insurers and financial institutions are working diligently to ready themselves for IFRS 17. There are significant changes in the works (and still more to consider) to ensure that insurance firms have appropriately modified operations to accommodate the new accounting standard. Downstream accounting systems, specifically sub-ledgers, are emerging as powerful data enablers as organizations work toward adoption.
IFRS 17 strives to bring greater transparency to insurance contracts and investment contracts while emphasizing the need to focus on data—and its accuracy, aggregation, governance, transparency, and usability.
Transitioning to IFRS 17, Maintaining IFRS 4
Insurers have a few choices on this journey, including re-implementing systems, redesigning their environment, or starting on an entirely new project for their accounting standard. Many insurance organizations are choosing to redesign processes. In doing so, however, they need integrated sub-ledger and trial balance capabilities, an area in which most insurance organizations are coming up short.
Making the required calculations is not the sticking point for insurers and financial institutions as they work toward IFRS 17 adoption. Instead, insurance firms are struggling with creating an environment in which they can test and review calculation data before posting them to the general ledger (considered the system of record).
A Robust Sub-ledger and Trial Balance Capabilities
Insurers can maintain sub-ledgers for reconciliation and transition and achieve compliant and auditable accounting standards, reporting, and consolidation. Also, they can gain visibility into the journal entries resulting from the accounting process, reconcile to the source, and any exceptions that require action before they export data to any general ledger.
With a redesigned, compliant approach, insurance organizations can integrate directly with a sub-ledger to understand each calculation before posting to the general ledger. This process keeps a massive amount of data and forecasts out of the general ledger, an approach that is undesirable and difficult to scale.
A redesign of operations enables insurers and financial institutions to integrate the sub-ledger to seamlessly flow into the general ledger—advancing insurance organizations toward adoption while introducing processes that are both efficient and scalable.
To learn more about the challenges and opportunities that IFRS 17 presents to insurance companies and understand how Oracle can help organizations rapidly achieve an integrated sub-ledger environment, feel free to message me to explore more or have a conversation.
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