The insurance sector in Nigeria can compete with its peers around the globe once the much-anticipated International Financial Reporting Standard (IFRS) 17 is integrated, taking effect this year.
This is the position of experts who spoke at various industry forums in 2023 about the implementation of the IFRS 17 said the adoption would help insurance subscribers make sensible comparisons between companies, their past performances, current financial positions, and risk exposures not only in Nigeria but globally.
The IFRS 17 was issued by the International Accounting Standards Board (IASB) in May 2017. It replaced the IFRS 4 Insurance Contracts and related interpretations and effective beginning on or after 1 January 2022.
Speaking at an industry forum in Lagos, Partner-in-charge of the IFRS implementation unit of Deloitte, Oduware Uwadiae, said the new accounting standard would have a huge impact in the sense that currently when liabilities are being measured, they are measured based on events that occurred whereas the new standard is forward-looking.
According to him, it is looking at the risk on the entire contract and the last mile.
“The current standards will only look at the risk as of today, what risk are we having today? But the new standard is looking at the entire risk from now till the end of the contract. So if I sign a contract today and it is going to expire in the next six years, I have to measure my risk from today till the end of the six years. So, as I am measuring it, if the risk is increasing each year, I can recoup additional losses on the instrument,” he said.
Speaking on the IFRS 17 when members of the Independent Shareholders Association of Nigeria (ISAN) visited the commission in Abuja, Commissioner for Insurance, Sunday Thomas, said the IFRS 17 would change how insurance companies present and report their financial statements.
