Barbara works with Clearwater’s largest insurance users to help them solve complex investment accounting and reporting challenges. She brings extensive industry knowledge and a deep understanding of best practices to her clients. As a Clearwater user in her former role, Barbara knows first-hand how to leverage the system to navigate changing regulatory requirements, create ad hoc reports, and actively monitor portfolios.
Prior to joining Clearwater, Barbara served as Director of Investment Accounting, Reporting and Operations, at National General, TIAA, RGA, and Athene.
Outside of work, Barbara enjoys spending time with family and friends, hiking, reading, and spoiling her dog.
Barbara has a Master of Science degree in accounting.
The January 1, 2023, deadline for insurers to adopt IFRS 9 is just months away.
By now, insurers impacted by the new requirements should be well underway in preparing and finalizing their processes for adoption and compliance. Accomplishing this as soon as possible is critical to both identify potential challenges and solve them.
Those who prepared early have already found challenges with the new data requirements under IFRS 9, a recent Clearwater survey found. The survey revealed 56% see data calculation as a significant challenge and 48% were concerned about data reporting and disclosure requirements.
It’s not too late for insurers to improve their processes and get what they need in place before the deadline.
With that in mind, here a few things insurers need to know as they prepare.
IFRS 9 introduces significant changes to what insurers have done in the past. It specifies the requirements for initial recognition and measurement, impairment, derecognition of financial instruments, and general hedge accounting. This means it impacts the lifecycle of the investments starting from inception through to disposal. It also carries detailed reporting and disclosure requirements.
IFRS 9 requires financial instruments to be classified as Amortized Cost (AC), Fair Value through Other Comprehensive Income (FVOCI), or Fair Value through Profit and Loss (FVTPL). There is work needed to set up the new classifications and ensure the measurement is accurate and follows the new testing models.
On top of that, all securities need to be reviewed under the IFRS impairment guidelines for expected credit loss and put in the appropriate stage. IFRS 9 classifies financial instruments into one of three stages:
Resource: Check out Clearwater’s IFRS 9 eguide for more details on the changes under IFRS 9.
It’s important for insurers to review the guidance carefully and make sure they fully understand the requirements. They should also work with their auditors to ensure the processes they have built are in line with expectations.
It’s also crucial for insurers to determine if their data providers and investment accounting and reporting software are up to the task of meeting the new requirements. You need complete, accurate data and the ability to easily drill down into the details of that data.
There are always challenges in standing up any new basis of accounting or significant changes in accounting standards. IFRS 9 is no exception.
Everything from gathering the correct data points to getting to that Day 1 ledger adjustment number is a big hurdle to cross. Not to mention preparing for the new disclosures needed.
In addition to working with their auditors, insurers have other resources to tap into, starting with their peers. Reach out to those in your network to learn how they are approaching the new standard and handling challenges.
It’s also important for insurers to have a technology partner that stands ready to support them through ongoing changes in accounting standards. For global companies, monitoring different regulatory and accounting standards is a challenging task.
At Clearwater, we have a dedicated team of accounting experts who closely monitor these changes to understand all the ins and outs of new guidance. Their expertise then shapes updates to the Clearwater solution to help our clients manage these changes.
For IFRS 9, Clearwater clients can use the solution to handle the new classification and measurement needs, report on the expected credit loss calculations for impairment, including staging requirements, and manage the new reporting and disclosure requirements.
A number of clients are already live with the IFRS 9 basis, and we’re helping hundreds more with their adoption. Working with this large network of insurers gives us a unique perspective to understand challenges and best practices. We can then share those insights with other clients to incorporate into their processes and preparation.
For example, a new client wanted to adopt IFRS 9 while they were implementing Clearwater. Their Clearwater servicing team helped them understand the necessary data points and worked with their third-party data providers to ensure they had what they needed. Further, the team could share from experience what’s worked well for other clients, including how to set up reports and disclosure requirements.
As the adoption deadline nears, it’s important to identify and solve pain points around IFRS 9 as quickly as possible. It’s not too late to find a solution that solves these challenges and that can give insurance teams more confidence.
To learn more about how Clearwater can help insurers confidently navigate IFRS 9 and more, schedule a personalized meeting with one of our solutions experts today.