In today’s competitive business environment, attracting, developing, and retaining top talent is a critical success factor for organizations of all sizes. A robust and effective early career talent development program is essential for companies looking to grow their future leaders from within. As the global economic uncertainty continues to loom, organizations must look at least three to five years into the future to plan for and invest in programs that ensure a steady stream of new, skilled employees to avoid skills gaps in the future.

Attracting early career talent and training them to become future leaders can be costly and time-consuming, but it’s an investment that pays dividends in the long run. After helping numerous organizations design, develop, and implement best in class programs, we have identified 5 strategies for successful early career talent development programs.

1. Create A Clear Roadmap for Your Early Career Development Program

Before designing your early career talent development program, it is important to look at least three years into to the future to think about and forecast what the organization will look like and what it’s resource needs will be. When organizations look to invest in early career programs, they are building the future of the organization in the present moment and envisioning what the future will look like is critical to the process.

Once this vision is in place, the next key step is to define the program’s goals and objectives via a roadmap. This roadmap needs to be clearly communicated to all stakeholders and employees, so that everyone is aligned. Embarking on an early career development program requires senior leadership buy-in, commitment, and support from a budgetary, resourcing, and strategic alignment focus. When building an early career program, keep in mind that you’re playing for the long term; it’s a 3–5-year commitment to build the next generation of high performing employees. The program investment must also align to the organization’s long-term strategy and goals.

2. Provide A Challenging and Collaborative Work Environment

Early career talent, especially Gen Zs, look for companies that offer an exciting and challenging work environment that provides opportunities for personal and professional growth. Create “on the job” learning opportunities that allow them to apply their expertise while also facilitating collaboration with more experienced colleagues across different functions. Effective feedback mechanisms are critical to establishing a healthy and safe work environment and having consistent and supportive feedback is especially important to Gen Zs. Providing access to senior leader mentors, buddies, coaches and networking opportunities with peers will also accelerate their professional development.

3. Tailor Your Early Career Development Program to Your Company and Industry

Developing early career talent for any industry is vital, yet creating a customized program that address your specific industry challenges is even more critical. A tailored program that aligns with the company’s business objectives and takes into account what’s happening in the industry is essential. For example, in the tech industry, with technologies and products evolving so quickly, it’s necessary to offer continued training, so employees can keep up with developments and integrate new learning into their roles. In addition to continued learning, internal organization process, templates, and roles will need to be adjusted to support early career talent within the organization.

4. Leverage Digital Learning to Reach All Learners

Organizations need to embrace new delivery methods to create personalized, flexible, and scalable learning programs. Digital learning tools such as online courses, e-learning courses, and simulations or virtual classrooms provide early career talent with various learning options. These options promote self-paced learning and are highly convenient as they can be accessed on mobile devices, in real time. Digital learning is cost-effective, purposeful, and more eco-friendly than traditional learning options.

2. Encourage Continuous Feedback and Measure Program Success

To ensure success, measure key performance metrics and provide continuous feedback to learners, the program team, and the organizational sponsors. On-going measurement and evaluation is essential in helping early career talent understand how they’re performing, what they’re doing well, and where they need to improve. Regular feedback is equally crucial for the program managers, as it helps them better evaluate the program’s success and identify required changes.

The Bottom Line

Attracting, developing, and retaining top talent is essential for organizations’ sustainability and long-term success. By creating and executing a well-designed early career talent development program tailored to industry needs, organizations can give their new, skilled employees the tools to be successful and increase their speed to competence. Encouraging continuous feedback and measuring the program’s success is an essential component of keeping the program relevant and assuring it delivers against desired key performance indicators. Investing in early career talent development delivers a strong return on investment. It attracts top talent looking for organizations with a clear growth trajectory and build’s the organization’s next generation of leaders.

Optimus SBR’s Learning & Enablement Practice

At Optimus SBR, we know first-hand that building a great team is about attracting, retaining, and engaging top talent. We partner with clients to create scalable, targeted, experiential learning programs that enhance people leadership, employee engagement, team collaboration, and performance results.

If you’re a leader looking to build an Early Career Development Program in your organization, please feel free to connect and learn more about opportunities to partner with us.

Giselle Kovary, Principal, Learning & Enablement Practice
learning@optimussbr.com

Let’s start with a big congratulations! You’ve made it, or are very close, and are now in a world of IFRS 17 compliance. Take your pat on the back, take a bow, and thank your project teams and all the functional areas that made this long-drawn-out miracle possible.

Now take a deep breath. Try and fight off that nagging feeling…

Why does it feel like this was just the tip of the iceberg?

For many, moving to IFRS 17 compliance has not meant moving into Business-as-Usual (BAU). In discussions with many insurers across the industry and throughout Canada and the Caribbean, there has been a struggle to deploy IFRS 17 beyond the direct project teams and move into BAU.  The project started with design & discovery, writing policy papers, and outlining requirements. It moved through implementation and several iterations of testing and tuning the key items to get to compliance. Comparative re-runs and/or movement to parallel felt like pulling teeth to make it work, with some insurers in different jurisdictions still working through this component.

The Struggle to Achieve BAU

So why do numerous companies working towards compliance in their first reporting period or having just completed Q1 struggle to achieve BAU?  This is primarily due to a few factors:

Without proper guidance and support, most insurers will not be able to fully capitalize on their IFRS 17 infrastructure investments. This includes those common elements that come with every IFRS 17 implementation such as a Data Lake, an IFRS 17 Measurement Tool, General Ledger updates, or in some cases, a new Subledger and the various reporting tools required to link multiple datasets and ultimately move to a fully transformed BAU.
 

Where is Your Organization on the Spectrum from MVP to Full Transformation?

The good news is that you can get there! Optimus SBR helps organizations navigate the path to accelerate to BAU with IFRS 17. Our support and implementation services include:

 

We Can Help Accelerate Your Transformation to BAU With Our Implementation Services


 
A Final Thought

Despite the investment required to reach compliance, insurers have yet to reap the full benefits of IFRS 17. We can help transform your program to BAU going forward. To learn more about how our services can help drive value from your IFRS 17 implementation investments, please reach out.

Optimus SBR’s IFRS 17 BAU Acceleration Services

Our IFRS 17 BAU Acceleration services help organizations fully leverage their IFRS 17 infrastructure to optimize their investment. Our team is one of the most experienced in the industry, having already supported 24 organizations, both in Canada and globally, through their implementation journey. We have the proven strategic and tactical expertise to help insurers get the most out of this new standard.

Contact Us for more information on how we can assist your team.

Evan Farlinger, CPA, CA – Principal, Financial Services Practice
evan.farlinger@optimussbr.com

 

Farshid Buhariwalla, CPA, CA – Senior Manager, Financial Services Practice
farshid.buhariwalla@optimussbr.com

Born between 1996 and 2012, Gen Zs are the new age workforce that is gradually changing the landscape of the corporate world. Driven by a strong sense of purpose, they constantly seek for authentic and fulfilling work experiences, and embrace experiences that allow them to grow, learn, and contribute to the world around them. As they enter organizations as early career talent , they often find it hard to adapt to traditional corporate cultures and leadership styles.

But it’s not just Gen Zs struggling to adapt. Managers of Gen Zs are having a hard time engaging this new group of employees. It is essential for all leaders to understand how to lead, motivate, and engage Gen Zs more effectively. So how do you inspire, motivate, and retain Gen Zs in the workplace?

Creating a Purpose-Driven Culture

Gen Zs crave purpose in their work, so it’s necessary to create a sense of connection and purpose that resonates with them. From our research, one of Gen Zs’ top goals is to “become a better person” and if they can see a connection between what they do at work and how they are growing and contributing to something bigger than themselves, they are much more likely be invested in the organization’s success. Start by ensuring that Gen Zs understand their role and the connection it has to the organization’s goals by explaining how their work contributes to the company’s success. By doing so, you can significantly increase engagement, reduce burnout, and enhance “stickiness” to the organization.

Encourage Personal and Professional Growth

For Gen Zs, personal growth is just as important as professional growth. By encouraging personal growth, you show that you are interested in their overall well-being. Offering opportunities for professional development, like attending conferences or training, will help them grow professionally. This investment also benefits the organization, especially if they can apply the new learning within their roles and receive coaching from their leader that reinforces the learning.

Embrace Flexibility

With a natural inclination towards work-life integration, Gen Zs love flexibility. The traditional workday may not work for them, so ensuring that the workplace is flexible enough to accommodate a fluid workstyle is critical to enhancing their engagement and retention. This could be the option to work remotely, flexible schedules, or even job-sharing arrangements. Gen Zs are focused on outcomes more than process or structure, and therefore, will expect autonomy to work on tasks/activities when and where it works best for them. On the other hand, managing expectations around ‘core’ business hours and anchor days in the office is important because Gen Zs need to understand the role they play in contributing to overall team success through commitments to others and business deliverables. Setting up goal posts for performance helps balance the needs for flexibility and in person collaboration.

Mentorship Programs

Gen Zs possess a strong growth mindset and crave mentorship. Investing in a mentorship program shows your willingness to support them in their professional growth while guiding them along the way. A good mentorship program helps to build trust, instill confidence, and ensure the mentees feel valued and supported. Ideally a mentor is not the same person they report to, so the relationship can be focused on holistic development and be driven by the Gen Z mentee, versus a top-down directive.

Incorporate Technology

As a tech-empowered generation, Gen Zs have grown up embedding technology into everything they do. Incorporating innovative technologies and new apps that can make work easier, faster, and more efficient for them will spark their productivity and creativity. Automation, gamification, and enhanced collaboration will all be benefits that resonate with Gen Zs. Organizations that don’t integrate technology into their businesses may be perceived by Gen Zs as less innovative, creative and cutting edge which can impact the ability to recruit top talent.

Conclusion

Leading and engaging Gen Zs in today’s corporate environment requires a bold approach. Creating a sense of purpose, encouraging personal and professional growth, embracing flexibility, providing mentorship opportunities, and incorporating technology are a few ways to effectively motivate and engage Gen Zs. Remember that Gen Zs are driven by authenticity, growth, and innovation, and the bolder you are in creating a progressive work environment for them, the more fruitful your organization’s team culture will become.

Optimus SBR’s Learning & Enablement Practice

At Optimus SBR, we know first-hand that building a great team is about attracting, retaining, and engaging top talent. We partner with clients to create scalable, targeted, experiential learning programs that enhance people leadership, employee engagement, team collaboration, and performance results.

If you’re a leader looking to build an Early Career Development Program in your organization, please feel free to connect and learn more about opportunities to partner with us.

Giselle Kovary, Principal, Learning & Enablement Practice
learning@optimussbr.com

With technological advancement rapidly reshaping how we do business, a company’s ability to leverage data to make more informed decisions is the key to staying competitive in today’s market. But many organizations are missing out on the full value of their data because they lack the ability to reliably translate vast amounts of raw data into actionable insights. To tap the potential of their data assets, companies need a clear vision and that means identifying what business decisions data analytics need to support and then creating a plan to get there.

Whether your organization is beginning their analytics journey or is further along in its analytics maturity, an objective analytics capabilities assessment focused on using data to make better decisions is an important first step to achieve your analytics goals.

Types of Analytics Assessments

Before commencing an analytics capabilities assessment, it’s important to recognize that there are two different types, strategic and tactical, and you need to decide which is best suited for your organization.

Strategic Analytics Assessment

A strategic assessment has a longer time-horizon and is more enterprise-scoped. It often covers several analytical capabilities involving large segments of organizational data, such as data governance, data science, and data visualization.

Example of a strategic assessment goal:

A strategic assessment is based on an analytics maturity plan that will ultimately help grow your organization’s analytical capabilities. The maturity plan will move you towards aligning your needs for integrating and utilizing data with your capability to deliver. Realistically, analytics maturity is not a single project – it should be thought of as a journey rather than a destination. Building an analytics maturity plan should start with defining key, future, capabilities, and a crawl-walk-run methodology should be applied.

How Do You Grow Through Analytics Maturity?

The road to analytics maturity usually begins with descriptive analytics and then moves to diagnostic, predictive, and ultimately prescriptive analytics.

A comprehensive strategic analytics assessment that effectively initiates your journey towards analytics maturity should answer these questions:

Tactical Analytics Assessment

In contrast to a strategic assessment, a tactical assessment has a shorter time horizon, narrower focus, fewer data source systems, and is designed to achieve a specific objective.

Examples of tactical assessment goals:

Tactical assessments have a specific end goal and as such some of the fundamental components differ from strategic assessments. A tactical assessment should answer these questions:

How to Develop a Plan to Achieve Your Analytics Goals

Regardless of whether it’s a strategic or tactical analytics capabilities assessment, an assessment should provide clear insight into where you are, what you need to achieve your identified analytics goals, and a plan to get there. In most cases business users need their analytics system to deliver specific information and quality results, on time and with context for decision making. They also want to have the ability to access data, reports, and dashboards from a single source. The obstacle is that many organizations have limited understanding of the depth and diversity of skills, resources, time, and investment it takes to get there. They are often unaware that the work done below the surface “The Iceberg Effect” is considerable.

So “how to get there” depends on several things:

A comprehensive analytics capabilities assessment will answer all these questions and provide a plan to advance your analytics to meet your organization’s needs. As illustrated below, a data and analytics plan should identify the desired result, determine existing capabilities, detail data and infrastructure required, show increasing value to the organization as the roadmap executes, define success criteria over iterations that address iceberg layers, and lay out the required skills when they’re needed and if currently available.

Improve Analytics Capabilities and AAIM for Success

An analytics assessment is unquestionably a critical starting point to improve your organization’s analytics capabilities. In response to client demand for a proven, reliable, and comprehensive analytics assessment approach, the data team at Optimus SBR developed and honed our Analytics Assessment & Improvement Methodology (AAIM). Through a process involving hundreds of assessments for organizations of various sizes and from many industries, AAIM was created to assess an organization’s current analytical capabilities, define analytical goals, and build a roadmap to get there.

AAIM is composed of six successive steps, all critical to evaluate your data and analytics reporting needs as well as your ability to deliver on them. AAIM acts as a catalyst to advance your organization’s analytics capabilities by providing an actionable roadmap to build a strong, scalable environment for high-performance analytics – customized for your organization’s needs.

Real-World Experiences Using AAIM

Global Logistics Organization

Here’s an example of how Optimus SBR used AAIM for a global logistics organization that had a web-based application allowing clients to manage shipments. The existing analytics system was highly constrained by a third-party, custom-built application. The diagram below illustrates how Optimus SBR used AAIM to deliver a data and analytics plan to better integrate several core operational systems in a new analytics facility that would support deployment at multiple customer sites and in a shared cloud environment.

The plan included short-, mid-, and long-term roadmaps to achieve their goals. As a result of the AAIM services Optimus delivered, the client acquired and deployed infrastructure to build new analytical capabilities into their web application. Their source data was integrated and automated – think billions of rows of data refreshed within a few minutes – and the interactive reports and dashboards delivered tangible insights that customers had been requesting.

Canadian Non-Profit Organization

This diagram illustrates how Optimus SBR employed AAIM to assist one of largest non-profit organizations in Canada. Their existing analytical capabilities were growing organically within individual departments, but when integrating data from multiple departments, the effort increased dramatically. The manual integration of data from multiple sources was error-prone, costly, and slow.

With AAIM, Optimus SBR delivered a roadmap to achieve data maturity growth over 4 phases. The plan focused on data governance, data integration, data visualization & analytics, and business process management. Existing infrastructure was deemed to be adequate, and the Optimus team immediately implemented the data warehouse for initial data integration. Data visualization reports were created and are now delivering insights that answer long outstanding questions for the client. This “quick win” phase was completed on time and as planned. The next phase is 4-6 months in duration and will launch shortly.

From Analytics Assessment to Better Business Results

It’s important to remember that analytics maturity is a journey, not a destination and limiting bumps in the road on the way is accomplished more easily when you plan. A proven assessment methodology that helps you successfully navigate your organization’s needs and provides an iterative roadmap to achieve your analytics goals is a low-cost way to reduce implementation risks associated with maturing analytics capabilities. The assessment process also builds trust in your data which is critical to embracing a data-driven strategy. A clear plan for how to use data and analytics to make better informed decisions, and deployment of the right technology, architecture, and capabilities will ultimately lead to better business results. Data is no longer just a commodity – it’s the key to unlocking business potential and staying ahead of the competition!

Optimus SBR’s Data Practice

Optimus SBR provides data advisory services customized to support the needs of public and private sector organizations. We offer an end-to-end solution, from data strategy and governance to visualization, insights and training. Contact Us for more information on our Data practice and how we can help you on your data journey.

 

 

Reading the standard, for the experienced, is a relatively straightforward exercise. However, interpreting the requirements of the standard into actual operationalized procedures is a much more complex task, especially when considering the long-term implications of an LDTI implementation, and the continued impact across multiple functions.

Accounting for LDTI is not simply a change in the DRs and CRs, but rather a new view to grouping, aggregating, and presenting insurance policies.  The implications of changes in assumptions, discount rates, and MRBs will need to be tracked at the grouping level in order to meet the increased financial statement disclosure requirements.  Many finance departments will look to capture these additional details in their GL or experience a wholesale change in their internal review and reporting structures.

Developing detailed requirements to capture what’s expected within the change to LDTI and ensuring a clear understanding of how the impact will be on an end-to-end perspective is key. Mapping those to the data requirements for the new standard is the baseline minimum change.

In this seventh and final article of our LDTI series, we explain how a sound strategy allows for more than LDTI compliance and sets the stage for success beyond mere implementation.

Why Does Compliance Require a Strategy?

Given the diverse requirements of the LDTI and the variance between understanding and implementing the new standard, insurers need to consider sound planning prior to implementation in order to achieve successful compliance.

Here are a few of the key implementation realities that insurers are faced with as they seek to comply with the new standard:

Streamline and Strategize

To ensure the appropriate alignment is in place, strong cross-functional program management needs to be in place to facilitate the conversations between finance, actuarial, and technology functions.  This will also require determination of what the build is that you are looking to achieve, whether it be Minimum Viable Product (MVP)/base compliance, optimization, or a full transformation.

Stepping into the LDTI transformation journey through a fast follower strategy allows for efficient implementation and optimization by utilizing the data and practices of other insurers within the industry. The chart below illustrates how this strategy works within the desired build for insurers. Yet, we often see clients focus on the “sweet spot” of optimization, leveraging the new standard as a catalyst for change.


 
The Right Strategy Reaps Benefits

The right strategy will allow you to achieve more than the base compliance and put the right building blocks in place for you to continue to transform your business well after compliance is achieved.

Ultimately, aligning your business objectives with the requirements of the standard can be an important task that requires specific skill sets in business and technology architecture to work through.


 
Bottom Line for Insurers

In due course, many front-runners have worked through building the right LDTI compliance strategy with various levels of help from consultants and subject matter experts to help achieve their goals. On the other hand, this experience can be integral for insurance companies who may not be as far along in their implementation, helping them avoid some of the pitfalls and surpass the theoretical to provide actual implementation insights.

Leveraging the learnings of others, having strong program governance and management in place, and investing early on will result in a much better outcome.

Insurers who plan for success and track their progress toward achieving their strategy and compliance goals will succeed, whereas those who do not invest in structuring their LDTI program, are likely the ones to experience a delayed headache that will come down the line.

By consulting with experts and with those who have supported the front runners in LDTI compliance, you can ensure that you receive the highest benefit from your investment in meeting the requirements.

Optimus SBR’s Financial Services Practice

Optimus SBR is an independently owned management consulting firm that works with organizations across North America to get done what isn’t. Our Financial Services Group provides strategic advisory services, process improvement services, risk management services, and project management support to leading Financial Institutions, insurers, asset managers, and pension funds.

Contact us for more information on LDTI

Peter Snelling, Senior Vice President, Business Development
Peter.Snelling@optimussbr.com
416.649.9128

This piece was developed in partnership with BDO and Valani Global.

Optimus SBR, BDO, and Valani have come together to establish accelerators for the LDTI journey.  Our accelerators do not only meet the compliance needs of LDTI, but also advance an insurer forward in the areas of financial transformation, operations modernization, and data innovation.

Service Partners
With access to a global knowledge base and professional expertise, BDO offers extensive value to their clients across all segments of the insurance and financial services industry.
Valani Global supports life insurance companies in achieving their financial risk management goals through implementations of Moody’s Analytics solutions including AXIS and RiskIntegrity for IFRS 17.

The statutory requirements of IFRS 17 are forcing a massive disruption and ultimately a transformation within the insurance industry. No IFRS compliant insurer will be able to escape the profound changes in their operating model, accounting policies, and subsequent accounting system outputs and flows. This extends to connectivity and alignment with and actuarial systems and outputs—all underpinned by IT systems construct, data and reporting requirements.

To conclude our IFRS 17 series, we wanted to pull everything together and discuss the other large standard impact that is likely to occur.

When many insurers think of implementing IFRS 17, they may not recognize there other standards that may also need to be applied—including IFRS 9 elections for assets and liabilities, and potentially IFRS 15 for revenue outside of your insurance contracts.

Application of IFRS 9 has been a requirement for companies’ annual reporting periods beginning on or after January 1, 2018.

However, in an effort to help insurers streamline implementation, the International Accounting Standards Board (IASB) deferred the application of IFRS 9 to come into effect for applicable insurers at the same time as IFRS 17. This allows for the deferral of reporting periods beginning on or after January 1, 2023 assuming they have continued to apply IAS 39.

Many companies with an insurance arm or are not predominantly considered an insurer, will have already implemented IFRS 9, including for their insurance components. That means there’s a vast amount of knowledge surrounding IFRS 9 and its three main components:

  1. Classification and measurement (C&M)
  2. Impairment
  3. Hedge accounting

Some companies may have already implemented IFRS 9 as part of the overlay approach. However, IFRS 17 allows you to revisit the election for the assets to be recognized at amortized cost (with appropriate amortization or Impairment), fair value through profit or loss (FVTPL), or fair value through other comprehensive income (FVOCI).  Liabilities whose effect of changes in discount rate on projected liabilities can be recognized through P&L or OCI.

For those that are going through IFRS 17 and IFRS 9 together for the first time as part of the temporary exemption and deferral approach, there are several key considerations that will be required as you navigate the dual implementation:

As the deadline to implement IFRS 17 nears, you need to examine and act on your compliance plans. This will include a cross-functional and holistic approach to treatment of your data & technology, along with your actuarial and finance functions. No one team can achieve compliance alone, and therefore it becomes extremely important to manage this IFRS 17 transformation effectively.

As you continue on your IFRS 17 journey or look to begin it, make sure that you are taking a holistic approach, as siloed efforts often lead to re-work and lost time. There are lessons from frontrunners that can be applied to help achieve compliance in the most efficient way possible. We, along with our partners, can provide the solutions you need to meet the required IFRS 17 deadlines.

(This is the final article in a series of seven articles.)

 

Optimus SBR’s Financial Services Practice

Optimus SBR is an independently owned management consulting firm that works with organizations across North America and the Caribbean to get done what isn’t. Our Financial Services Group provides strategic advisory services, process improvement services, risk management services, and project management support to leading Financial Institutions, insurers, asset managers, and pension funds.

 

Contact us for information on our IFRS 17 Jumpstart Acceleration Program:

Peter Snelling, Senior Vice President, Business Development
Peter.Snelling@optimussbr.com
416.649.9128

Evan Farlinger, Principal, Financial Services Group
evan.farlinger@optimussbr.com
647.502.3739

 

Service Partners
With access to a global knowledge base and professional expertise, BDO offers extensive value to their clients across all segments of the insurance and financial services industry.
KR Services specializes in the practical application of international financial reporting and actuarial standards in the developing world.
Valani Global supports life insurance companies in achieving their financial risk management goals through implementations of Moody’s Analytics solutions including AXIS and RiskIntegrity for IFRS 17.

The statutory requirements of IFRS 17 are forcing a massive disruption and ultimately a transformation within the insurance industry. No IFRS compliant insurer will be able to escape the profound changes in their operating model, accounting policies, and subsequent accounting system outputs and flows. This extends to connectivity and alignment with and actuarial systems and outputs—all underpinned by IT systems construct, data and reporting requirements.

Model changes sometimes sound simpler than they really are. One constant in our IFRS 17 projects is that change ends up being more complex and require more resources than anticipated.

Models need to be upgraded around three of their aspects:

  1. The new accounting standard results in many of the income elements to be derived from the roll forward of the policy liability. Where systems used to deal with one set of policyholder data at a time, they will now need to handle two: one from the start of the period and one from the end of the period. Also, in order to properly reflect income in each quarter, policy movements of the period will need to be tracked as well. System providers have been working hard for a long time on their systems in order to handle this enormous increase in data to be treated. And all is not completely done yet. This means that modeling changes are being implemented at the same time as the core of the software is being modified. It leads to the need to regularly upgrade software versions—a task that will add multiple validation steps along the way as you will want to reconcile the pre- versus post-upgrade calculations.
  2. New calculations need to be programmed in the actuarial software. Some may be similar or consistent with the approach and the basic structure of the system. Others will be more complex to program. Again, providers have been hard at work programming all these new calculations. However, all this new functionality needs to be tested and vetted at the same time the implementation project is in full gear. This will put significant strain on your actuarial resources.
  3. Some products will see the way the valuation of their liabilities become more complex, requiring more detailed information and additional assumptions to be made before the valuation can be performed. Products with traditionally short horizons will end up being valued under the general measurement model approach will no doubt be among those causing headaches for actuaries involved in the projects.

In addition to the changes to their core, actuarial systems will need to interact with a much larger number of other systems. Where traditionally, one source file could suffice in some circumstances to perform the valuation and where the output was relatively simple, the new environment will bring a much-heightened level of challenge for the actuaries.

Sources of data are likely to be more numerous and come from a wider range of system types. That’s a direct consequence of the amount of additional data that needs to be treated. Also, a new intermediate system will be implemented: the contractual service margin (CSM) engine. This system will require a very detailed amount of information from the actuarial software in order to perform the calculation of the CSM and related loss component.

In addition, the CSM engine will perform the roll forward of the policy liability and its components. The interaction between the actuarial system, CSM engine, and data hub will increase the workload of actuaries involved in the financial statements preparation process.

Commercial software has been developed and offered to the insurance market over the last few years. As explained earlier, providers have been working hard on these solutions for a long time. In almost all cases, the development work is still ongoing, which complicates the implementation process.

However, commercial solutions are the best avenue to deal with IFRS 17. Solutions such as RiskIntegrity for IFRS 17 and AXIS, with which we are working, offer a wide array of functionality, reports, and integration that makes them relatively easy to use. No internal solution is likely to offer the same level of completeness and safety.

Finally, actuaries will need to be ready to withstand more scrutiny of their work and systems that are at the centre of the IFRS 17 financial statement work. Their systems will be more tightly linked to the other systems of the company and the actuarial process will in all likelihood be more integrated with the processes of the finance department. This will have an impact on and will require adjusting all of the governance aspects of the actuaries’ work.

Don’t let this opportunity for enterprise data advancement pass by. Our team can help you build a data hub strategy that accelerates your IFRS 17 journey and advances the data maturity needs of your organization. Contact us to get started.

(This is the sixth in a series of seven articles.)

 

Optimus SBR’s Financial Services Practice

Optimus SBR is an independently owned management consulting firm that works with organizations across North America and the Caribbean to get done what isn’t. Our Financial Services Group provides strategic advisory services, process improvement services, risk management services, and project management support to leading Financial Institutions, insurers, asset managers, and pension funds.

 

Contact us for information on our IFRS 17 Jumpstart Acceleration Program:

Peter Snelling, Senior Vice President, Business Development
Peter.Snelling@optimussbr.com
416.649.9128

Evan Farlinger, Principal, Financial Services Group
evan.farlinger@optimussbr.com
647.502.3739

 

Service Partners
With access to a global knowledge base and professional expertise, BDO offers extensive value to their clients across all segments of the insurance and financial services industry.
KR Services specializes in the practical application of international financial reporting and actuarial standards in the developing world.
Valani Global supports life insurance companies in achieving their financial risk management goals through implementations of Moody’s Analytics solutions including AXIS and RiskIntegrity for IFRS 17.

Across Canada, provincial governments offer a variety of application-based funding programs to fund service improvement initiatives for municipalities. In 2019, Ontario’s Ministry of Municipal Affairs and Housing launched the Audit and Accountability Fund (AAF) and the Municipal Modernization Program (MMP) to help large, small and rural municipalities improve their services by funding reviews and new projects. Little did the Ministry know that this would roll out during one of the most challenging times for municipalities in delivering services, with the pandemic impacting pretty much everything they did. In May 2020, we described how municipalities embarking on Service Delivery Reviews (SDRs) could pivot as the pandemic took hold. Many did, as we saw municipalities across the province access these funds to undertake SDRs to improve the use of technology, identify how to work and collaborate more closely with neighbouring municipalities through shared services, and find budget efficiencies throughout their budgets.

Themes from Round 1 of Service Delivery Reviews

Municipalities have largely completed the first round (“Intake 1”) of these projects, and the Municipal Affairs and Housing subsequently announced a second round of the MMP to continue to support small and rural municipalities in finding tactical, realistic ways to improve service delivery.[1] With the applications for this second round having just closed on March 15th, we want to provide an overview of the themes we saw across SDRs, an overview of the areas of focus for the second round, and for those municipalities that are successful in their second round applications, provide some advice on how to execute with the funds made available for this investment.

The first rounds of both the AAF and MMP contained broad eligibility criteria, allowing municipalities to focus on reviews with the “purpose of finding savings and efficiencies”. Some municipalities focused on line-by-line budget reviews. Others undertook SDRs that looked at costs, processes, people, technology, and the outcomes they were achieving. Services reviewed spanned everything from Fire Services to Parks and Recreation to Fleet Management, and everything else in between. While each service in each municipality had its own unique opportunities, we saw some common themes:

Executing on Round 2: Fit For Purpose, Whether a Marathon or Sprints

The second round of MMP funding for small and rural municipalities maintains a focus on delivering modern, efficient, and financially sustainable services; as noted, Expression of Interest applications were due March 15, 2021, with three types of projects suggested:

While this sounds like a fairly wide scope, municipalities were encouraged to submit proposals for projects specifically focused on:

As they start executing and getting into the nuts and bolts of these areas, municipalities’ efforts here will need to be “fit for purpose”, whether that purpose is going to be a marathon or a sprint. Digital modernization and service integration are akin to starting a marathon – these are not be taken lightly, and will take a long time to complete. But the training and development to do them can be broken into discrete chunks – like a person beginning with a 5K here, then doing a 10K there, municipalities can slowly build up capabilities to tackle the larger effort. This can involve identifying stakeholders, setting up some preliminary governance or working groups, requirements gathering, and then moving into the nitty gritty. Over time, this can help municipalities address technology challenges and take on growth by allowing them to dig deeply but deliberately. These efforts – particularly when they are vendor agnostic – are rarely wasted, as they document what organizations need to understand and do at each stage, and avoid rushing to procure technology solutions too quickly This helps them decide whether the 10k run is fit for purpose – i.e., good enough – or whether they need to push further. It can also help identify key performance indicators that will allow leadership to track the efficiency and effectiveness of the service.

Streamlined development approvals and shared service/alternative delivery models, while no small undertaking themselves, can be more sprint-like. Improving discrete processes or sub-processes – items as simple as aligning on timelines, establishing communication protocols, and other aspects that will improve the predictability of the process – can be done in short bursts of activity with focused attention. Shared service and alternative delivery model reviews similarly benefit from focusing on a few select services, or often, aspects of them as municipalities identify where collaboration can take place, whether formally or informally, and then gather steam from there.

A Final Thought

COVID-19 has made citizens more engaged than ever in their communities, and acutely aware of the services that municipalities provide, and how they are provided. Whether services can be accessed easily in person or online has gone from being important to being of paramount importance for certain residents. It will be important to make sure that reviews of these issues get the focus and the process right.

 

Optimus SBR’s Municipal Practice

Optimus SBR is an implementation-focused firm that specializes in turning policy into action. Our Municipal Practice, part of our broader Industries and Government Practice, has conducted a range of engagements for municipalities covering frontline and back-office services, transportation and transit, social services, public works, emergency services, public health, long-term care, community and economic development, and numerous others.

If you found this helpful, give us a call, or send us a note.

Brad Ferguson, SVP, Industries and Government Practice
Brad.Ferguson@optimusssbr.com
416.649.9184

David Lynch, Principal
David.Lynch@optimussbr.com

Jesse Burns, Manager
Jesse.Burns@optimussbr.com

 

 

[1] This matches a similar “Intake 2” round through the AAF for Ontario’s large municipalities.

The statutory requirements of IFRS 17 are forcing a massive disruption and ultimately a transformation within the insurance industry. No IFRS compliant insurer will be able to escape the profound changes in their operating model, accounting policies, and subsequent accounting system outputs and flows. This extends to connectivity and alignment with and actuarial systems and outputs—all underpinned by IT systems construct, data and reporting requirements.

By now, most insurers have established an IFRS 17 implementation plan and are working on the design of their solution. This article outlines how the right data strategy for IFRS 17 can be extended across the enterprise to advance an insurer’s data maturity rapidly and cost effectively leveraging the investments in IFRS 17 as a foundation.

In working with many IT leaders on IFRS 17, we recognize that adoption of the new standard poses many issues for insurers, including:

Despite these challenges, the data advancements required for IFRS 17 are often the right advancements to apply to the overall enterprise. This includes the following benefits.

Data as an asset

Agile data integration

Business intelligence and advanced analytics maturity

Data governance and literacy maturity


The opportunity

The deadline for IFRS 17 compliance is rapidly approaching, making it crucial for insurers to examine and act on their compliance plans sooner rather than later. The question for most insurers now is: will they simply create a minimum viable product or will they seize this opportunity to truly transform their business and take a market leadership position?

Our service partner BDO has established a data platform accelerator for the insurance industry known as InsurHub to meet the data needs of IFRS 17 and establish the foundation for enterprise data advancement. It leverages the Microsoft Azure data platform and contains fundamental best practices to be the gold standard for pragmatic data governance and operations.

Why InsurHub?

InsurHub can help accelerate the path to IFRS 17 compliance and establish the foundation for enterprise data advancement. The InsurHub accelerator shortens the timeline of IFRS 17 implementations with a library of data connectors, a data lake repository aligned with the requirements of IFRS 17, key financial statements and management reports, and a collection of advanced analytics models. It contains fundamental best practices to be the gold standard for pragmatic data governance and operations.

Don’t let this opportunity for enterprise data advancement pass by. Our team can help you build a data hub strategy that accelerates your IFRS 17 journey and advances the data maturity needs of your organization. Contact us to get started.

(This is the fifth in a series of seven articles.)

 

Optimus SBR’s Financial Services Practice

Optimus SBR is an independently owned management consulting firm that works with organizations across North America and the Caribbean to get done what isn’t. Our Financial Services Group provides strategic advisory services, process improvement services, risk management services, and project management support to leading Financial Institutions, insurers, asset managers, and pension funds.

 

Contact us for information on our IFRS 17 Jumpstart Acceleration Program:

Peter Snelling, Senior Vice President, Business Development
Peter.Snelling@optimussbr.com
416.649.9128

Evan Farlinger, Principal, Financial Services Group
evan.farlinger@optimussbr.com
647.502.3739

 

Service Partners
With access to a global knowledge base and professional expertise, BDO offers extensive value to their clients across all segments of the insurance and financial services industry.
KR Services specializes in the practical application of international financial reporting and actuarial standards in the developing world.
Valani Global supports life insurance companies in achieving their financial risk management goals through implementations of Moody’s Analytics solutions including AXIS and RiskIntegrity for IFRS 17.

The statutory requirements of IFRS17 are forcing a massive disruption and ultimately a transformation within the insurance industry. No IFRS compliant insurer will be able to escape the profound changes in their operating model, accounting policies, and subsequent accounting system outputs and flows. This extends to connectivity and alignment with and actuarial systems and outputs, all underpinned by IT systems construct, data and reporting requirements.

Many of our clients originally underestimated the work needed to comply with the standard. For most short-term business, the premium allocation approach (PAA) can be used and it generally gives bottom-line results similar to current practice.

However, even the simplest, monoline property and casualty insurers have realized there are significant complexities in practice. These include:

Here are a few of the key implementation realities that insurers are faced with as they seek to understand how their product features and mix will drive compliance with the standard:

With the deadline to compliance fast approaching, insurers need to be rapidly examining and acting on their compliance plans. We, along with our partners, can provide the solutions you need to meet the required IFRS 17 deadlines. Contact us to learn how we can help.

(This is the fourth in a series of seven articles.)

 

Optimus SBR’s Financial Services Practice

Optimus SBR is an independently owned management consulting firm that works with organizations across North America and the Caribbean to get done what isn’t. Our Financial Services Group provides strategic advisory services, process improvement services, risk management services, and project management support to leading Financial Institutions, insurers, asset managers, and pension funds.

 

Contact us for information on our IFRS 17 Jumpstart Acceleration Program:

Peter Snelling, Senior Vice President, Business Development
Peter.Snelling@optimussbr.com
416.649.9128

Evan Farlinger, Principal, Financial Services Group
evan.farlinger@optimussbr.com
647.502.3739

 

Service Partners
With access to a global knowledge base and professional expertise, BDO offers extensive value to their clients across all segments of the insurance and financial services industry.
KR Services specializes in the practical application of international financial reporting and actuarial standards in the developing world.
Valani Global supports life insurance companies in achieving their financial risk management goals through implementations of Moody’s Analytics solutions including AXIS and RiskIntegrity for IFRS 17.

Optimus Think

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