IFRS 17 Technology Solutions: Build or Buy?


Depending on an insurer’s ultimate financial reporting operating model goals, various solution options could be utilised to address IFRS 17 compliance requirements. Many insurers are considering developing an actuarial & accounting control tower from which to calculate, analyse, control and ultimately develop insights into the financial performance of the insurer from a statutory reporting perspective. We are seeing the need for such a function to comprise a team of both actuaries, accountants and reporting data and systems experts working together in sync to ensure compliance and on-time delivery.


The International Accounting Standards Board has issued a new International Financial Reporting Standard called IFRS 17 that is set to replace IFRS 4 on the 1st January 2022. IFRS 17 focuses on accounting for insurance contracts and requires contract liabilities to be calculated as the present value of future insurance cash flows with a provision for risk.

Ultimately IFRS 17 changes the way that insurers operate their business and analysts interpret the performance of their business.

In order to comply with the requirements and more importantly operationalise IFRS 17 a fundamental change in processes and systems are required.

Key operational challenges

The end to end reporting cycle will change substantially, from sourcing data to publishing and disclosing results to the market. Key operational challenges include, among others:

  • Data sourcing and management from core administration systems through to reporting and business intelligence.
  • Change and integration of system architecture.
  • The level of collaboration required between actuarial and finance teams.
  • Ensuring a controlled environment focussed around data quality and alignment, systems architecture and business processes.

In addition, the Standard will have a key impact on the level of disclosures and the management of communications to analysts and stakeholders.

Build or Buy an IFRS 17 system solution?

Whether an insurer is looking to develop a bespoke, customised solution or buy an off-the-shelf, out of the box solution (or perhaps consider a blended approach) certain key design and technology capabilities are to be considered including:

  • A synchronised business and IT architecture approach between processes, data and technology.
  • An alignment of process design and business outcomes through an orchestrated workflow management solution.
  • Ensure alignment and ability for the solution to cope with current and future reporting metrics including, for example, regulatory metrics such as Solvency II.

In the next section, we will expand on some of the types of solutions available in the industry to meet the needs of the Standard. Whether an insurer follows an actuarial based approach that focusses on actuarial modelling and calculation; a financial solution focussing on the ledger or a more generic workflow-based approach or a combination of the three; the possibilities are endless.

Actuarially focussed technology solutions

Various actuarial software vendors are providing solutions for insurers to enhance their current actuarial cashflow and modelling systems with advanced features through add-on capabilities and functionality.

Traditional actuarial cash flow vendors have released IFRS 17 specific modelling packages or capabilities.
Current generation modelling tools could replace traditional cashflow modelling tools or be used as an add-on purely for IFRS 17 related functionality, and start-up software providers are appearing on the market.

In addition, we have seen certain vendors providing easy to code, flexible integration, standardised cash flow modelling tools that offer an integrated alternative and could be utilised as an enabler for a more customised bespoke self-built solution.

Newer cloud-based technologies are coming onto the surface including analytics as a service type approaches.

Ultimately insurers looking to upgrade their actuarial capability to be able to cope with some of the IFRS 17 calculation requirements will need to ensure the chosen solution can integrate and connect data, models, systems and processes between actuarial functions and accounting functions. Certain workflow type software solutions focussed on actuarial or complex tasks could assist with this.

Finance focussed technology solutions

A finance focussed sub-ledger or integrated general ledger solution could be developed with the use of accounting software that handles detailed accounting rules from data through to reports and disclosures. The need to connect actuarial systems and its outputs with such accounting based solutions are going to be one of the essential functional requirements.

Traditional accounting and ledger software solutions have developed modular accounting interfaces for accounting and management of postings while newer current generation solutions are offering integrated modelling and calculation engines focussing on pre-built data management tools and techniques for disclosure and reporting.

We have seen a number of financial and actuarial vendors partnering to provide insurers with a holistic integrated approach.

IFRS 17 is creating an opportunity for firms to modernise their legacy systems and embrace sophisticated and automated systems that can improve operations and provide greater business insight.

Integrated actuarial and finance focussed alternatives

The delay in the implementation date of the IFRS 17 Standard is giving insurers additional time to prepare. Many insurers are going back to the drawing board on systems and data technology solutions, and some are even considering enhancing their traditional reporting tools with current generation generic analytical and workflow related capabilities as a cost-effective, flexible alternative to buying more bespoke IFRS 17 specific bespoke software solutions.

Some of these modern day platforms provide powerful and fast analysis, business intelligence and visualisation capabilities with some also offering end to end workflow orchestration capabilities. Many of these current generation solutions integrate seamlessly with other systems and solutions (even with traditional legacy-type systems), and these could be offered in the cloud or on-premise.

Modern-day analytical tools provide the ability to write to and from databases.

Software packages that allow tasks to be automatically scheduled using existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. Workflow tools have advanced automation tools that provide information to users within each step of the process. Business Process Management gives dashboard-style control across broader processes that deliver greater visibility and control at a higher level into the process as it integrates the workflow with various applications, technologies, and human-related tasks.

Automation solutions including Robotics Process Automation or advanced macros could be utilised in conjunction with more traditional spreadsheet-based calculations to deal with increased data transfer and analytics requirements.

Data Flow Diagram

Next steps and Conclusion

Other technologies can also be included in the suite of modern day capabilities. For example, Natural Language Generators can be used to automatically convert financial information into meaningful and easy to understand text.

With so many vendors offering various solution alternatives, insurers need to make sure that the solution and/or vendor they choose is the right fit. This could be achieved through running a focussed proof of concept considering the relative performance of different types of solutions based on a key set of functional and non-functional requirements. Some of the key considerations to take into account are listed below.

Key Considerations — IFRS 17 technology solutions

  • Cost of solution (including development, and software licensing and hosting fees)
  • Time to implementation
  • Ease of integration
  • User friendliness
  • Flexibility to adapt to future regulation changes
  • Ability to provide a good fit to the structure and technology kit of the company
  • Can showcase how delivery to an enhanced working day timetable could be achieved without the explicit need for more FTEs

Article Source:

Valerie du Preez, Dupro (FIA) Advisory

Michael Jordan (FASSA/CERA), Dupro Advisory

For more information on our library of IFRS 17 technology solutions and/or a comprehensive list of assessment criteria to consider please contact info@actuartech.com

IFRS 17 Technology Solutions: Build or Buy?

Written by Valerie Du Preez

This post was certified by Actuartech on

Review: This article is well-researched and provides valuable information.

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