Munich Re CFO Jörg Schneider echoed calls to postpone the implementation of new accounting rules known as IFRS 17, saying the change will be costly for insurers and that they would need more time to prepare for it due to its complexity, the Financial Times reported.
IFRS 17, which is due to come into force in 2021, is designed to make it easier for analysts and others to compare company performance. It replaces the interim IFRS 4 standard, which allowed insurers to continue accounting for insurance contracts under national standards, which made it difficult for investors to compare similar companies in different countries.
"For the preparers, IFRS 17 will be very expensive, and due to its complexity it will be difficult to understand for the public and the media," Schneider reportedly said. Despite this, the new accounting system would still be better than the current one, he stressed, according to the Dec. 3 report.
"In light of the necessary testing and potential refinement, a delay to IFRS 17 would be good. The more time we get to prepare, the higher the quality and consistency we can deliver," he reportedly added.
Aviva Plc CEO Mark Wilson said recently that he expects the implementation of the accounting standard to be delayed. Earlier in 2017, Wilson, along with his counterparts at Legal & General Group Plc and Prudential Plc, wrote to U.K. Chancellor Philip Hammond criticizing the new regime, calling it "an unnecessary, costly and risky proposition which is against the interests of the U.K.," the FT reported.