This juncture, the Philippine nonlife insurance industry must be deep in thought and action preparing for the implementation of IFRS17 by Jan. 1, 2025. IFRS stands for international financial reporting standards and No. 17 refers to the latest global standard for all insurance contracts replacing all other earlier standards currently in place. The main objective of IFRS17 is to standardize insurance accounting across all jurisdictions with the end in view of improving comparability; thereby increasing transparency. This will also provide users of accounts with the needed information to understand an insurer's financial position, performance and risk exposure; valuable information for regulators, investors and the insuring public, among others. IFRS17 does this by dictating which insurance contract items should be on the balance sheet as well as the profit and loss statements of an insurer and how these are to be measured and presented in the financial reports.
In a Zoom meeting with the Insurance Commission last May 21, 2021, the Philippine Insurers and Reinsurers Association (PIRA) together with its consultant on IFRS17, PWC-Isla Lipana, presented the initial findings of the industry impact assessment after embarking on a year-long study to help PIRA members assess where they are and whether they are prepared for the big shift and what remains to be done to adequately prepare the industry and its members for compliance. In a few words, the industry can either sink or swim and the role of the commission is crucial to the outcome.