IFRS 17 Implementation Lessons from Early Adopters

IFRS 17 Insurance Contracts — effective for annual periods beginning on or after 1 January 2023 — represents the most significant change to insurance accounting in a generation. For insurers still navigating the transition or embedding the new standard, the experiences of early adopters offer valuable lessons.

Having supported several East African insurers through IFRS 17 implementation, our team has observed consistent patterns in where implementations succeed and where they struggle. This article shares those observations.

Lesson 1: Data Quality Is the Critical Constraint

The most common — and most costly — discovery in IFRS 17 implementation is data quality gaps. IFRS 17 requires granular, contract-level data going back to the inception of in-force policies. Many insurers find that their legacy systems simply do not hold the data they need in the format required.

Early adopters who invested upfront in comprehensive data assessment and remediation — even when this extended the implementation timeline — consistently achieved better outcomes than those who deferred this work. If you have not yet conducted a thorough data readiness assessment, this should be your immediate priority.

Lesson 2: Actuarial-Finance Integration Is Non-Negotiable

IFRS 17 sits at the intersection of actuarial science and financial reporting in a way that IFRS 4 never did. The Contractual Service Margin, the risk adjustment for non-financial risk, and the measurement approaches for General Measurement Model contracts all require close collaboration between actuarial and finance teams.

Organisations that treated IFRS 17 as either a pure finance project (without adequate actuarial input) or a pure actuarial exercise (without adequate finance ownership) consistently struggled. Effective implementations had dedicated actuarial-finance working groups with clear joint accountability.

Lesson 3: The Contractual Service Margin Requires Deep Understanding

The Contractual Service Margin (CSM) — which represents unearned profit in insurance contracts — is one of IFRS 17's most distinctive concepts and one that many finance teams found hardest to internalise. Understanding how the CSM is established, how it is amortised, and how experience adjustments flow through the P&L or to the CSM is essential for competent IFRS 17 reporting.

Boards and audit committees also need sufficient IFRS 17 literacy to provide effective oversight. Director education programmes should include dedicated IFRS 17 sessions for audit committee members.

Lesson 4: System Implementation Takes Longer Than Expected

Every insurer we have worked with has found that system implementation — whether adapting existing systems or implementing dedicated IFRS 17 calculation engines — took significantly longer than initially planned. Vendor delivery delays, data migration challenges, and integration complexity with existing actuarial and finance systems all contributed to extended timelines.

For insurers still in implementation, building realistic schedule buffers is essential. Parallel running — producing IFRS 17 figures alongside the old basis — requires significant additional effort but is invaluable for building confidence in the new numbers.

Lesson 5: Engage Your Auditors Early and Often

The organisations with the smoothest audit processes engaged their external auditors early in the implementation — sharing key judgements, modelling approaches, and accounting policy choices as they were developed rather than presenting completed positions for audit. This enabled any auditor concerns to be addressed before they became audit issues, and built auditor confidence in the implementation.

For insurers yet to complete their first full year of IFRS 17 reporting, we strongly recommend proactive engagement with your audit team on key judgements — particularly around the risk adjustment methodology, the level of aggregation for insurance contract groups, and the discount rate approach.