IFRS17 Buyer's Guide

This guide provides a high summary overview of IFRS17 including many of the difficulties that we’ve seen users experience combined with practical advice on the process of selecting the best IFRS17 software and the key features users should look for.

Buying IFRS17 software has
its challenges

Whatever route you go, SEEING IS BELIEVING. Case studies and customer success stories are valuable and earn their place in the process, but vendors have a tendency to only showcase their most successful projects.

Every credible vendor will be willing to demonstrate their product and be scrutinised by your subject matter experts to evidence that their software can meet your most intricate requirements.

  • What is IFRS 17?
  • Selection Guidance
  • Common Challenges
  • Top 10 Features

What is IFRS17?

IFRS17 Insurance Contracts is the new IFRS Accounting Standard for insurance contracts and replaces IFRS4 Insurance Contracts. It is effective for annual reporting periods beginning on or after January 1, 2023.

IFRS17 was designed to achieve three core objectives:

IFRS17 applies to any company that writes ‘insurance contracts’ and is required to report under IFRS. Insurance contracts are defined as follows:

Contracts under which the entity accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder.

The insurance industry is clearly impacted but others may find themselves caught by the standard. Organisations issuing certain financial guarantee contracts or fixed-fee service contracts (such as roadside assistance programs) will need to check the standard carefully to establish if IFRS17 applies. Note that although investment contracts issued with discretionary participation features do not meet the definition of an insurance contract, they are still accounted for under IFRS17 if the entity also issues insurance contracts. However, the scope of IFRS17 excludes a number of specific items, for example:

Where any doubt exists, we’d recommend speaking to one of our consultants who through our extensive network can help you to obtain the appropriate expert advice.

IFRS17 requires a company to measure insurance contracts using updated estimates and assumptions for each relevant reporting period that reflect the timing of cash flows (i.e. discounted) and any uncertainty relating to insurance contracts (i.e. risk adjustments). Profits are recognised as a company delivers insurance services (as opposed to receiving premiums) and future expected insurance contract profits must be disclosed, in particular:

IFRS17 includes new disclosure requirements on both the face of financial statements and within the notes aimed at delivering clarity and transparency for users of financial statements. Significant judgements when applying IFRS17 have to be disclosed and the balance sheet reconciliations should help to explain drivers of change in the contract liability.

How should I go about selecting the
best IFRS17 software?

Identify your needs

Identify your principal requirements before you start looking at vendors – refer to the ‘Top 10 Features’ section to discover the typical capabilities that our customers normally look for.


Vendors will typically provide their own consultants or point you in the direction of their implementation partners. Verify that these consultants have proven experience and product knowledge. After all, a fantastic solution implemented poorly, is a poor solution.

Book a demo

We have simplified this process by including the main IFRS17 contenders and their relevant features for free on our site. Book demos here with one or more vendors and we will facilitate the process and insulate you from the initial sales hassle.


Far too often training is dropped as a “cost-saving exercise”. Ensure you spend the time training your staff on the software – it will greatly increase the adoption rate across your business and reduce your reliance on expensive variable resource in the future.

Vendor assessment

Engage with all stakeholders (Procurement, IT, Finance & Actuarial) to determine your final requirements and perform your full software and vendor due diligence. Use our free tailorable Request For Proposal (RFP) pack to get you started.


Purchasing an annual support package from the vendor or an implementation partner can be more cost effective than trying to manage it all yourself. Look for packages that include bug fixes as well as regulation changes.

What are the challenges of
IFRS17 reporting?

IFRS17 becomes effective for reporting periods beginning on or after the 1st January 2023 with comparatives required from the 1st January 2022. As such, for any organisation without a robust solution already in place, time is of the essence and action must be taken with laser focus. A pre-packaged tactical solution that can be easily implemented and integrates well with other systems is a must.

  • For a straightforward single entity solution using a pre-packaged solution, six months is often considered to be the minimum implementation time.
  • For larger groups or more complex implementations, then an 18–24-month project should be planned for.

Whether you’re looking to implement IFRS17 for the first time or replace your existing process, consideration should be made of the organisational objectives, be it one or more of the following:

  • Standardisation of groupwide software, processes and policies.
  • Adopting localised best-fit solutions and processes.
  • Enablement via actuarial systems, sub ledgers, CPM extensions or bespoke solutions.
  • Maximising alignment and data capture to achieve efficiency in Solvency II and alternative GAAPs.

Many insurance organisations have concluded that achieving IFRS17 compliance either provides an opportunity or necessitates a need for review of all other major finance and admin systems at the same time. Is it the right time to conduct a wider finance transformation programme or will a temporary or long-term bolt-on be sufficient? Obtaining agreement as to the scope of objectives may be the greatest challenge.

Whatever your organisational scale and complexity, an IFRS17 implementation will be a complex project and will require skilled project management, accounting, actuarial and IT experts. Consideration should be given to what, where and how these resources will be sourced:

  • Do you have the resources and skills to conduct such a project internally? You should consider the pros and cons of recruiting temporary vs. permanent resources and how easy these resources be to come by.
  • Using a global consultancy or big 4 accounting firm is a common route for large complex organisation but for others, a specialist product vendor and their implementation partner might provide a more cost-effective and quicker solution.

Data sourcing and contract grouping (onerous/non-onerous and other) requirements present a huge data challenge including:

  • Granularity of data capture and the related performance impacts;
  • Data capture by cohort i.e. contracts that are incepted not more than a year apart;
  • Measurement models (General Measurement Model, Premium Allocation Approach or Variable Fee Approach);
  • Data storage requirements;
  • Existing data quality and completeness;
  • Discounting cashflow projections;
  • Historical assumptions and experiences for transition; and
  • Connections with upstream and downstream systems.

Gaps will have to identified and filled whilst business processes may have to be changed.

IFRS17 requires considerable change to reporting and disclosures, in particular the following should be assessed:

  • All tools and processes that capture and report financial data e.g. ERP, consolidation systems, planning tools, data warehouses, data reconciliation tools, tax, regulatory, disclosure management systems and investor relations reporting;
  • Tax calculations and returns methodologies and effective implications;
  • Banking and other covenants and the potential need to renegotiate terms;
  • How will the choice of period-to-period vs year-to-date impact interim reporting at group and local levels?

Managing the business during a long transition phase brings a number of financial reporting challenges which may be relevant as follows:

  • Managing the timing and transition of management reporting from IFRS4 to IFRS17;
  • Producing management reporting comparatives on the same basis;
  • Reporting on both IFRS17 and IFRS4 for a time with continuous reconciliations;
  • Updating plans, forecast and budgets on the same basis as management reporting. Are these also run under the new and old standard for a period of time?
  • Determining KPIs that are suitable in the new world. Will a change in KPI measurement cause an intended or unintended change in organisational behaviour?
  • Establishing whether internal remuneration targets and long-term incentive schemes should continue to be based on the old targets or a new set of targets

The Standard brings a number of choices that will impact reporting and business processes including:

  • Selecting the appropriate transition option and understanding the impact of that choice on future profits;
  • Establishing whether adopting the Premium Allocation Approach will make it simpler (for general insurers) or will it actually create problems in the future;
  • Updating cash flow models to cater for the contract grouping requirements;
  • Choosing the appropriate risk adjustment model to adopt;
  • Determining where discounting should be managed – within the actuarial system or the IFRS17 system?
  • Considering the level of granularity to run calculations at;
  • Understanding the impact of whether insurance finance income/expense be presented in the Income Statement or disaggregated between the Income Statement and Other Comprehensive Income (choice is on a portfolio-by-portfolio basis); and
  • Ascertaining which options your competitors are taking. Will you be directly comparable or do you want to be?

Top 10 features to look for when buying
the best IFRS17 software

At a minimum, you’ll need software that features the appropriate Measurement Model (PAA / GMM / VFA) logic and rules, captures the cashflows, provides the calculations (e.g. CSM) and outputs the double entry journals necessary to comply with the IFRS17 accounting standard.

More complicated groups or organisations will need customisation to meet business process requirements, build their own reports, refine the options, reduce the risk of error, improve the process, provide added value and reduce the operating costs. Naturally the costs will vary significantly depending on the complexity of the requirements, the amount of customisation required and whether this is a first-time implementation or replacement project.

1. Pre-Packaged Solution

If compliance with the IFRS17 standard is the primary goal with little need for value-add then a pre-packaged or ‘out-of-the-box’ solution will typically be the easiest, quickest and cheapest option. The software defines the options, data capture, calculations, process and outputs into which the organisation must fit. Some customisation may be possible but could be limited in its scope.

It’s important to check that the pre-packaged elements are suitable for your initial needs. There may be product limitations (e.g. multi-entity or multi-GAAP reporting, discounting, customised charts of accounts etc) that effectively turn a pre-packaged option in to a full scope implementation and the associated time and cost that comes with that.

Can the out-of-the-box version be customised later if required? This may be useful where compliance with the standard in time for its effective date is the primary objective. Adding value can then be achieved later without having to rip out the existing solution and purchasing further software down the line.

2. Breadth

Will the chosen software meet your current and future IFRS17 (and maybe other GAAP) requirements? The requirements of the standard are likely to evolve over the next few years or your business may change. If adopting a tactical (e.g. a PAA only solution), check whether it provides the necessary flexibility to easily meet new requirements (e.g. GMM).

3. Group Consolidation

Not all solutions can cater for consolidated groups – check their capabilities carefully to see if they match your requirements. In particular, can it manage multiple entities, perform intercompany eliminations of reinsurance contracts, handle many currencies and have a single instance wherever the entity resides?

4. Aggregation Levels

At which level of aggregation will you need to capture data, run calculations and produce outputs at? Does it need to be at contract level, grouping, portfolio, bespoke aggregation or a mixture.

5. System Performance

Could the system efficiently handle data transfers to and from other internal systems, data storage, calculations and reporting? Performing calculations at a deep level of granularity (e.g. contract level), may cause the system to strain under the volume of transactions and outputs.

6. Discounting and Risk Adjustments

Some software requires you to perform discounting and/or risk adjustment calculations before being captured by the IFRS17 software on the assumption that the actuarial system will handle this. Consideration should be given to where you require discounting and risk adjustments to be handled.

In addition, does the system allow you to disaggregate insurance finance income or expense between profit or loss and other comprehensive income?

7. Reporting

Consider where you intend to generate Insurance financial statements and all the notes (reconciliations, risk concentration etc) from. Maybe all you need is the subledger of data or postings for the general ledger system with data being transferred into a consolidation, data warehouse or business intelligence system.

If reports are required direct from the IFRS17 solution, review what reports are prebuilt within the system and how difficult is it to create new reports.

For practical purposes, do reports need to be easily integrated with day-to-day tools e.g., Microsoft Excel or PowerPoint? This is often overlooked during the planning phase.

8. Data Quality and Traceability

Unbalanced journals and reports are clear indicators that something has gone awry. However, not all errors are so easy to spot. Check what in-built validations cover the quality, completeness and consistency of the data and how easy it is to interrogate any problems.

Being able to drill down and interrogate calculation logics is going to make understanding the calculations and problem finding much easier. In addition, audits of the calculations will be much easier to facilitate.

9. Multiple GAAPs

Can the system be configured to manage insurance contracts under IFRS17 and other GAAPs (e.g. US GAAP) at the same time? Combining multiple requirements into a single system will potentially create significant efficiencies in process and a much lower cost of ownership.

How about Solvency II reporting? Consider whether efficiency gains could be made by incorporating Solvency II elements.

10. Simulation and Forecasting

Being able to run simulations and forecasts in the system is particularly useful during the initial implementation to provide insight into the impact of the initial choices that need to be made.

Additionally, simulations and forecasts can be used to make the process of annual budgeting and forecasting much more efficient.