With its gold-standard implementation of IFRS17, Partners Life lived up to its name in more ways than one. In the midst of both a company acquisition and a sale, a partnership approach was key to success for one of New Zealand’s top health and life insurers.
From the start, Partners Life made collaboration a defining feature of its IFRS17 project. With a dedicated steering committee (SteerCo) at the helm, this was a journey that the company’s different teams and external partners would make as one.
“The key challenge with any project is to make sure your stakeholders are aligned and that there’s clarity between them,” said chief of finance and deputy CFO Jaco Grobbelaar. “We also took a long time understanding where we are, where we want to be and the priorities we need to address to get to the end of the journey together.”
That meant both recognising the diverse aspects of the project and determining how to make them work in tandem.
Setting targets
For Partners Life, there were clearly two sides to the IFRS17 story – managing the data on the one hand and interpreting the accounting standard’s technicalities on the other.
Mr Grobbelaar said, “We gave equal weight to data and technical interpretation from the outset. From what I understood, a lot of the market spent most of their time on the interpretation and not so much on the data elements.”
But there was also a third dimension to consider: The opportunity to transform the firm’s actuarial and accounting systems digitally along the way.
“Why go through such a significant technical interpretation project without taking advantage of transformation?” he said. “While you’re cooking in the kitchen, you may as well do something spectacular with it. So, we got our IT team involved from the beginning, along with business execs and the board.”
Partners Life was already in the right headspace for a back-office overhaul. “A key ingredient of a successful transformation is having a good data infrastructure. We’re one of those insurance companies that place a lot of emphasis on technology, which gave us a good foundation to build on,” he said.
Compatible technology
As part of its transformation, Partners Life took time to select an optimal IFRS17 solution – and opted for FIS Insurance Risk Suite (formerly Prophet), an award-winning actuarial modelling and risk management system.
A crucial part of this choice was the system’s ability to slot in with the firm’s existing technology, including its accounting subledger and reporting platform.
Mr Grobbelaar said, “We needed a solution that didn’t disrupt our overall architecture and that’s where Insurance Risk Suite was a very important cog for us. It’s also a proven technology offering, the staff knew it well and we felt it was the best IFRS17 solution on the market.
“As well as making sure there’s harmony and that the whole ecosystem works well together, we wanted to minimise human intervention in the process and automate as much as we can. That gives us all those good things you want as a business – a single source of truth, reliable data and results you can get whenever you need them.”
Teaming up
As Partners Life’s IFRS17 project kicked off, internal teams, new resources and external vendors worked closely together to implement the new accounting standard. The key was to involve everyone – not only the project team, but also business-as-usual (BAU) employees.
“We brought in project resources,” he said, “and involved BAU teams from the beginning, which created a sense of buy in. The transition to IFRS17 is significant, and the more exposed staff are to it, the more comfortable they will be with its impacts and the more determined to make it work.”
Kept on track by the SteerCo, the project team worked tirelessly to get all the data in the right format, understand current data outputs and decide which FIS data inputs were required. But ultimately, it took around two years of building, testing and fixing before the IFRS17 system could start generating initial results.
Specialist expertise was critical to driving the project to completion. Partners Life’s chief and appointed actuary Kate Dron said, “With our project manager, we were very lucky to get someone with an accounting background and who understood the project. You can’t treat IFRS17 like a standard project.
“You also need the right technical expertise, from actuaries, accountants and technology vendors like FIS. We thought of FIS as a partner, not a third-party supplier. The FIS team bent over backwards to support us and it worked nicely having them on the other side of the world.
“It allowed us to get more done, as FIS could continue the work overnight, NZ time – on top of doing early mornings and late evenings, their time, to accommodate us.”
Extra firepower
Partners Life’s IFRS17 project, however, wasn’t without its challenges. Most notably, during the implementation process, the firm both acquired a business, BNZ Life, and was acquired by another, Japan’s Dai-ichi Life.
Mr Grobbelaar said, “With BNZ, we quickly had to make sure there was alignment between our businesses on the technical interpretation of IFRS17 and also on data cleansing. So, there was a considerable amount of effort on our side – we basically introduced a whole new level of architecture into the process.”
As Japan isn’t implementing the new accounting standard, the acquisition by Dai-ichi Life had less of a direct impact on the IFRS17 project.
Bedding in
Partners Life’s IFRS17 project may now be complete, but the transition continues to a new world of insurance accounting. Now, rather than the domain of specialist resources, IFRS17 processes will become part of BAU. The handover, however, won’t happen all at once.
“It hasn’t been a straight cut over,” said Ms Dron. “It’s important to have some continuity, so the project team and SteerCo can keep supporting the BAU team.”
Mr Grobelaar said, “There’s going to be a period of bedding in, as you’d expect with any insurer: getting used to the behavior of IFRS17, the mismatch on contract boundaries and the impact on your P&L.
“And there’s always the risk of technical interpretation changes in the market. In fact, during the implementation, we had to pivot on a few interpretations and change our coding. But having involved our auditors from day one, we knew they were comfortable with our transition balance sheet and avoided rework later on.
“For now, it’s all about making sure we’ve got the month-end process crisp and tight and that we’re meeting our group reporting deadline.”
Another important partnership to emerge from the project has been with FIS software specialists. The project team has been able to sit down with people that helped write the software, go through IFRS17 results and identify any problems.
“That’s the skill of a quality resource,” he said. “FIS knew exactly where to look for certain issues and that stopped us wasting time trying to find them ourselves. It made a big, positive difference to the efficiency of the project.” A