1. Insurance IFRS Seminar December 2, 2016 Session 37
Professionalism
Insurance IFRS Seminar
December 2, 2016
Session 37

2. Background
More chances of misunderstandings and real or perceived ability to manipulate the results
Greater complexity in the calculations
Systems and models
Understanding and explanations
Greater impact of assumptions, including those that aren’t observed on the results
Less predictability (at least initially) of the results
Key transition provisions that can affect results for years to come
Actuarial standards of practice may be lagging these issues

3. Scenario 1 Communication of results to senior management Ask yourself:
How well does senior management currently understand the profit emergence and volatility of current reporting?
How easy will it be for senior management to understand these changes?
What will be your requirement to communicate these to senior management?

4. Scenario 2 Pressure on assumption setting
When would you be influenced by senior management to revise certain assumptions?
Never
Possibly where they are not observable and they may have a better view than me
Possibly where they are not observable and they pay my salary
Everything should be arrived as a consensus
They are really the assumptions of senior management so it is their decision

5. Scenario 3 Systems and models
You don’t have appropriate models to performed the new calculations and there is no budget to build or buy these models. What do you do?
Refuse to do the calculations until Management commits to buy or build the new models
Come up with your best approximation of the correct results and disclose all the potential short cuts
Come up with an approximation that includes a margin in case there are errors in your models

6. Scenario 4
Disclosures
Disclosure requirements will be much greater than they once were
How do you balance satisfying the requirements and not sharing trade secrets or proprietary information?
What do you do if the disclosure requirements appears to require sharing such secrets?

7. Scenario 5 Hypothetical cutting corners dilemma
Assume you scoped a systems implementation, received approval for the budget, and began implementation. You now realize that the system as designed will not meet your needs. What do you do?
Think about short cuts you may be able to implement to meet the requirements but stay within budget and don’t communicate to senior management that they system will have these shortcuts/shortcomings
Do so and communicate to senior management that your original scoping was flawed
Seek additional funds to complete the project appropriately

8. Thank You