THE insurance industry is at the top among the business organizations that use much paper. From the proposal to offer the coverage, the issuance of the policy and forms of acknowledgment up to the payment of claims — paper is the main ingredient. Then came computerization, a welcome solution to the paper-intensive insurance business. Companies built their own computer systems to mechanize the issuance of insurance contracts, which come in several pages, including the additional pages called endorsements. The insurance policies are personalized with the companies' logo and in several colors, too! Copies can be reproduced as needed and sent electronically as well. A lot of efficiency was therefore achieved by computerization. We thought that was already an achievement until more technical and sophisticated systems were developed. The need to catch up and be aligned with the present way of doing business has become urgent. Just push back to five years ago, say, before the pandemic. The change in the accounting system under the IFRS 17 standard has not yet been discussed. The existing system was doing its job perfectly well. Fast forward to 2024. The financial statements of insurance companies will now be prepared in the IFRS 17 format to serve as preparation for or comparison with the 2025 financial statements. The industry associations, both for life and non-life, are doing a fantastic job of getting the new accounting and reporting system in place and being implemented as required in 2025. Consultants like the auditing and actuarial firms have teamed up to provide the much needed assistance for its implementation.
Are we ready then to switch to the new accounting system? I believe the companies are ready. But not all employees are. Understandably, training can only be done for a group of employees. Others have their own assignments to do in the everyday operations of their companies. But it is imperative that they should also be trained to use the new system. Companies see that need, but how to do it is still something to figure out at this time. Should they continue to hire consultants to train everybody? That may be expensive. Should the first trainees handle the training? They may not have the skills to pass on the knowledge effectively. But there should be no compromises with regard to this project — to upskill all the employees in the organization.
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