Insurers in Favor of IFRS Accounting Standards: EIU Survey
More and more insurers demand a single accounting standard and framework to be followed globally, as they feel that it would enhance the consistency and transparency of financial reporting. This was one of the major findings of the survey carried out on insurance finance executives by EIU (Economist Intelligence Unit) for Deloitte.
The survey also revealed that almost half of the insurers’ surveyed wish to witness the coming together of the 2 primary accounting regimes that are used by insurance companies globally. Around forty seven per cent of the respondents stated that they wanted U.S. to get rid of the accounting framework and standard followed nationally and follow the IFRS standard instead. The insurers expressed this desire, even as the IFRS rules for the insurance liability is yet to be finalized and the United States GAAP is now being set up for a complete shake-up for the last 4 years.
On the other hand, both IASB and the FASB are addressing the proposals to find a solution to the existing situation. But despite the progress made in this direction, both the boards are struggling to find a common ground on all the matters, which in turn is causing the delay in the implementation of the global accounting standards for insurance organizations.
Over half of the survey respondents (fifty one per cent) mentioned that their biggest concern was that the time period for the fresh IFRS for insurance related contracts (IFRS 4 Phase II) was uncertain, whereas around fifty two per cent cited finance related instruments (IFRS 9) as the biggest issue troubling them. As many as fifty six per cent of the insurers surveyed stated that they would patiently wait for the accounting standards to be finalized and only begin their projects afterwards so that the new accounting rules can be implemented accordingly.
More than two hundred insurance executives from different parts of the world were contacted to compile the survey report. They were requested to share their opinions and viewpoint with regard to the effect of the new accounting rules on their organizations and business.