IFRS 17 solution of the year: FIS

Asia Risk Awards 2022

FIS has won the award for best IFRS 17 solution of the year for the second year in a row. It impressed judges with the supercharging of its FIS Insurance Risk Suite, ahead of the rollout of new reporting standards in the insurance sector. The FIS Insurance Risk Suite is a one-stop shop for insurers to comply with IFRS 17 across the full spectrum of products, including life, health and non-life insurance.

The new International Financial Reporting Standard 17 (IFRS 17) — which replaces IFRS 4 on accounting for insurance contracts — was first published in May 2017 with a go-live date of January 2023. As an early thought-leader in the IFRS 17 solution space, Florida-based FIS released its relevant solution just a month later in June 2017, and has kept pace with insurers’ changing data and accounting needs ever since.

When the new reporting rules kick in, insurers’ actuarial systems must produce substantially more detailed output than under IFRS 4. FIS’s award-winning risk management solution covers all IFRS 17 calculations, income statement generation and balance sheet forecasting and projections. The FIS Insurance Risk Suite is powered by distributed database technologies that generate larger volumes of granular results data while minimising runtimes.

As IFRS 17 also requires actuarial and accounting domains to exchange significant amounts of data, the transfer and translation process must be handled with solutions that offer precision.

Jason Fasi, corporate communications analyst at FIS, explains: “Our data solution provides a means to map actuarial data to accounting labels or accounts, and a natural reconciliation point for that data in the event of a query.”

Reporting can eat into insurers’ time, so to help them fast-track their implementations, FIS created an IFRS 17 toolkit with a template for managing reporting data and results. This includes scripts for automating the creation of inputs to calculations, covering both initial and subsequent measurements, and uploading the subsequent results to the data repository for mapping to accounting entries.

Fasi says: “We maintain the toolkit as part of our software and have made regular updates since its launch. Together with FIS Insurance Accounting Suite (formerly Enterprise Accounting Suite), it provides an IFRS 17 solution that meets both actuarial and accounting needs.”

Many insurers have been using FIS’s Insurance Risk Suite in “parallel run” with their existing systems for months, to ensure they are ready to comply with IFRS 17 when it goes live in January. This has given FIS ample chance to finetune its offering by updating its actuarial libraries, toolkit and sub ledger, and beefing up stress-modelling capabilities.

These updates mainly involved optimising code and making enhancements around managing business risks under IFRS 17. As a result, FIS anticipates few further changes to either the libraries themselves or their base code, which means less upheaval for insurers in January.

Fasi says: “Our IFRS 17 solution is more than just an IFRS 17 solution; it remains the central risk platform for many insurers and helps them set premium and reserve levels, manage capital, project income statements and forecast the balance sheet, along with support for business planning.”

Top insurers turn to FIS for a comprehensive actuarial and risk management solution that can keep up with IFRS 17’s exacting standards. TAL, one of Australia’s leading life insurers, faced the operational challenge of managing the complex reporting requirements for insurance contracts under the new international accounting standard.

TAL was acquiring another life insurance business and required technology that would work easily across both organisations and help merge their operations. FIS’s Insurance Risk Suite was optimal because it performs IFRS 17 calculations within an actuarial rather than a finance system. It gave TAL natural advantages for business planning and regulatory reporting – while also improving connectivity and data flow between risk and finance. FIS’s secure public cloud helps TAL increase flexibility and control costs. The solution’s Assumptions Manager gives TAL the tools to record profit under the rules of IFRS 17. The solution’s Insurance Data Repository, a purpose-built schema for insurance cashflows and contractual service margin data, helps TAL with its business intelligence and regulatory reporting.

IFRS 17 calculations are made within the FIS Insurance Risk Suite actuarial engine. This means users can input metrics related to the new standard into their day-to-day work, such as when they are pricing contracts, stress-testing and performing general projections. This helps to both report and manage their business risks under IFRS 17.

FIS’s attention to detail over the past year differentiates it from its competitors. It has put out two major releases and several minor releases to ensure its clients will be up and running to comply with IFRS 19 in January. These improvements are widespread: model run processes; API and process automation capabilities; IFRS 17 data management processes; and the quality, service and automation of FIS’s managed cloud service.

Fasi says: “Our IFRS 17 solution is mature, and we’ve invested heavily in it over the last eight years. But we continue to invest constantly in the technology to meet insurers’ needs today and in the future.”