How Ind AS 117 presents an opportunity for transformation, ET BFSI
The introduction of Indian Accounting Requirements (Ind AS), particularly Ind AS 117, signifies a serious shift in India’s insurance coverage sector, aligning monetary reporting with worldwide requirements.
Whereas the transition poses challenges — particularly in know-how, knowledge administration, and collaboration — it additionally gives insurers with a possibility to modernise, rethink monetary processes, and set up a extra agile, data-driven basis for the long run.
With the appropriate strategy, insurers can leverage this regulatory shift as a sustainable aggressive benefit.
The influence of Ind AS 117
The most important hurdle in implementing Ind AS 117 isn’t simply the accounting adjustments; it’s the operational overhaul wanted to assist them.
The usual requires extra frequent, detailed reporting, which suggests insurers should have techniques able to managing complicated knowledge flows, automating calculations, and integrating actuarial and monetary reporting capabilities seamlessly.
Many insurers are nonetheless counting on legacy techniques that weren’t designed for this stage of reporting complexity. Updating these techniques necessitates cautious planning, funding, and cross-functional collaboration. Finance, actuarial, and IT groups — typically working in silos — might want to work collectively extra carefully than ever to make sure a easy transition.
Past compliance: An opportunity to strengthen monetary administration
Whereas adopting Ind AS 117 might look like a purely regulatory and accounting train, the brand new customary forces a extra granular strategy to monetary reporting, making it simpler to determine underperforming merchandise early, refine pricing methods, and make knowledgeable strategic choices.
A key change below Ind AS 117 is the requirement to recognise and account for onerous contracts (i.e., insurance policies anticipated to be loss-making from inception). This stage of economic element gives deeper insights into product efficiency, serving to insurers refine pricing methods and optimise their portfolios.
The brand new customary additionally encourages insurers towards larger monetary transparency. Enhancing reporting consistency and comparability provides traders and regulators a clearer image of an insurer’s monetary well being. Those that embrace the change stand to realize elevated belief and credibility out there.
The know-how issue: Getting ready for the long run
Efficiently implementing Ind AS 117 includes extra than simply assembly new reporting necessities. It entails making a technological basis that enhances agility, effectivity, and decision-making. Automation, real-time knowledge processing, and seamless system integration will set aside those that merely comply from those that try for a long-term edge.
In truth, international insurance coverage gamers have realized {that a} fragmented or patchwork strategy to compliance could be each pricey and ineffective. Ahead-thinking corporations have leveraged this transition to modernise their monetary architectures, integrating actuarial, accounting, and reporting capabilities right into a unified, scalable system.
Indian insurers now get pleasure from drawing classes from these international experiences, equipping them to make extra knowledgeable and strategic selections from the outset. Throughout a recent executive roundtable, Bhavna Verma, appointed actuary at IndiaFirst Life Insurance, emphasised the significance of selecting the best know-how accomplice and establishing a transparent implementation technique.
Munich Re,, as an example, adopted SAP Fioneer’s superior monetary subledger system to streamline monetary processes throughout enterprise items, deal with massive transaction volumes, automate complicated calculations, allow real-time insights, and enhance reporting transparency — all crucial capabilities in an Ind AS 117 world. Equally, different international gamers have efficiently navigated this transition, setting a precedent for Indian insurers.
Designed for multi-standard accounting, the Financial Products Subledger (FPSL) simplifies Ind AS 117 compliance whereas offering insurers a scalable, high-performance monetary system that bridges actuarial and accounting functions, serving to insurers improve effectivity, achieve deeper monetary insights, and future-proof their operations.
Future-proofing insurance coverage finance with Ind AS 117
Ind AS 117 isn’t just about complying with new accounting guidelines. It’s about redefining how insurers handle monetary knowledge, threat, and efficiency.
Insurers who look past compliance and put money into the appropriate techniques right now will set the tempo for the trade within the years to come back.
