The West African Insurance Companies Association (WAICA) has urged insurance companies in West Africa to take steps toward harmonising their implementation of the International Financial Reporting Standard (IFRS) 17. The association noted that harmonising IFRS 17 would help to ensure consistency in reporting and make it easier for investors and other stakeholders to understand and compare financial statements across different insurance companies.
Barineka Thompson, the CEO of Mettlehouse Consulting and former director of the National Insurance Commission (NAICOM), stated that the implementation of IFRS 17 offers a great opportunity for all WAICA members to improve the quality and consistency of their financial reporting. This assertion was made in a paper titled “Harmonising Financial Reporting in West Africa: IFRS 17 Insurance Contract Implementation Guide for Operators and Regulators,” which was presented at the 2023 WAICA Education Conference in Freetown, Sierra Leone.
Thompson stated that IFRS 17 ushers in a new era of accounting for insurance contracts, as it introduces principles-based requirements rather than the previous rules-based model. He urged WAICA members to lead by example and set the tone for other regional blocs with common cooperation and interest.
According to Thompson, the adoption of IFRS 17 is not just about reporting numbers, but also about communicating a company’s performance and its ability to create value. He emphasized that the new standard requires a company-wide effort and that all stakeholders, including management, investors, and analysts, should be prepared for the changes it will bring.
Thompson noted that the impact of IFRS 17 will be felt by a wide range of stakeholders, including those who prepare financial statements, those who oversee companies that issue insurance contracts, investors, regulators, analysts, and auditors. He highlighted that the new standard will improve the comparability of the measurement, recognition, presentation, and disclosure of insurance contracts and, ultimately, the financial statements of WAICA member companies. This, in turn, will enable investors to make better-informed decisions and promote market efficiency.
He emphasised that IFRS 17 would improve the consistency of reporting and facilitate the work of the College of Insurance Supervisors (CIS) of the West African Insurance Supervisors Association (WAISA). The CIS is a forum for insurance supervisors from member countries of WAISA to collaborate and share experiences in the field of insurance supervision.
“It is a great opportunity for WAICA members to develop and adopt uniform illustrative financial reporting to provide a minimum basis template for use by operators in the region. This can be achieved through policy adoption by the WAISA under the West African Monetary Zone (WAMZ) protocol,” he said.
According to Thompson, it is crucial for management to establish a steering committee to oversee the successful implementation of IFRS 17 and facilitate transparency and auditability. He called on regulators to show leadership and coordinate the industry by providing clear roadmaps for implementation. He further pointed out that there is currently a lack of consistency in the way insurance companies report their financial results in West Africa, similar to other jurisdictions around the world. However, he stated that the establishment of the WAISA is a positive step towards harmonizing standards and promoting best practices in the region.