Lagos, July 5, 2023: Leadway Assurance Ltd., on Tuesday, said it was on course with the implementation of the International Financial Reporting Standard (IFRS 17).
Mr Raphael Akomolede, of the Finance Department of the insurance company, stated this while delivering a paper at a training organised by the insurer for journalists covering the insurance and pension industries in Lagos.
The title of the paper is: The Impact of IFRS 17 on the Insurance Industry.
The IFRS 17 is an international financial reporting standard developed by the International Accounting Standards Board (IASB) for all insurance companies across the globe with effect from Jan. 1.
IFRS 17 replaces IFRS 4, which was the temporary standard formerly used, and provides new standards for reporting the financials of insurance firms.
Akomolede explained that the main objective of the IFRS 17 is to standardise insurance accounting globally and help account users to make sensible differences between companies, their past performances, current financial position and risk exposure.
He stated that one of the deficiencies of the IFRS 4 was that the standard was domesticated by insurance firms in their various countries using the local Generally Accepted Accounting Principles (GAAP) to measure insurance contracts.
According to him, the IFRS 4 does not provide a single way to account for insurance contracts and existing accounting, which makes it difficult for investors to see which groups of contracts are profit-making and which are not.
Akomolede commended the National Insurance Commission (NAICOM) for providing a roadmap for the implementation of the IFRS 17 for insurance industry in Nigeria.
He noted that the commission had been working assiduously since 2019 towards ensuring the full adoption of IFRS 17 in Nigeria.
“For the first time, there is a single IFRS accounting model for all types of insurance contracts that will be transparent and aligned to general IFRS accounting of other industries.
“The IFRS 17 will cover the methods for calculating the liabilities for insurance contracts and the resulting new profits recognise pattern for these contracts,” he said.
According to him, Leadway has completed the solution design for the standard, which takes care of Gap Analysis, Financial and Operational Impact Assessment, designed future state of finance process and Technology Gap Analysis Development.
Akomolede said the solution provided also caters for documentation and review of target operating model, preparation of technical documents, reviews and vendor selection for IFRS 17.
According to him, relevant departments of the underwriting firm are working simultaneously on system testing, pre and post- implementation, review and production of the 2021 and 2022 financial positions.
He said the relevant departments would also produce interim IFRS 17 compliant financial statements of the insurance company, including the transition disclosure.