Page 197 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 185

3.2.Technology and Data

With the implementation of improved technology solutions to mitigate the long-term requirements
it creates a prospect, through automation of manual processes and improvement in efficiency, to shift
the finance and actuarial footprint towards areas of higher value add.

3.3.Change Management

Enforcing this complex radical change will require well-structured project management with strong
program disciplines spread across the functionally agnostic workstreams. Ind AS 117 implementation
will require robust governance structures with broad representation and involvement of senior leadership,
ideally linked to the industry and regulators.

Key design decisions will need to be managed through a dedicated framework to control cross-
functional impacts along with associated costs and benefits. This will be the opportunity to make future
proofing and optimal design choices that will lay the foundation for future changes. For example, premium
debtors, which have previously been a high-level accounting adjustment, will now need to be reflected
within the liabilities, which are typically in the actuarial realm.

Through active participation from various functions of the business will instil “a changing culture” in
people as well as foster a more collaborative work environment. This will pave the way for revolutionizing
the reporting process and the future operating model with greater alignment between the teams.

3.4.Governance

Once implemented, the Standard will also improve stakeholder confidence through increased
transparency, improved quality of information and greater comparability of information for both within
the group company and across the industry.

Given the importance of insurance companies to the wider economy, effective implementation will
provide benefit across the board. Conversely, poor implementation will result in disruption and risk to
many stakeholders, which will incur additional financial and non-financial burdens on the insurers.

4. Accounting Challenges (Transition)

Transitions are never easy, and Ind AS 117 certainly not going to be an exception. The Standard
allows for the use of the three approaches: Modified Retrospective Fair Value Approaches over Full
Retrospective based upon certain criteria. In case there is a challenge in getting the past data, there will
be undue cost in getting this; the Company will have any accounting policy choice to either go for
Modified Retrospective or Fair value Approach.

However, these methods also come with their challenges. The standard also gives an option to