How can IFRS 17 help drive strategic financial planning?

 

Author: Masimba Zata, Director, Product Management - Insurance, Moody's

For many insurance finance professionals, IFRS 17 has become synonymous with complexity, compliance pressure, and operational overhaul. It’s a standard that has also demanded organizations invest heavily in systems, processes, and talent. 

But what if we’ve been looking at it the wrong way? Forward-thinking insurers are now recognizing IFRS 17 as a strategic opportunity rather than a regulatory burden, reframing it as a transformational catalyst to unlock new levels of insight, agility, and alignment across their financial planning and analysis (FP&A) functions.

This blog explores how.

 

1. Turn compliance into a competitive advantage

At its core, IFRS 17 introduces a more transparent and consistent framework for measuring insurance contracts, requiring insurers to produce detailed, forward-looking data on cash flows, risk adjustments, and contractual service margins. While this level of granularity may seem daunting, IFRS 17 lays the foundation for more strategic financial planning.

With this richer data and standardized methodologies, insurers can now compare performance across portfolios, geographies, and product lines with greater confidence. This opens the door to more informed decision-making, better capital allocation, and enhanced stakeholder communication.

In short, IFRS 17 doesn’t just help insurers meet regulatory expectations—it helps them exceed strategic ones.

 

2. Strategic opportunities hidden in the standard

The data infrastructure required for IFRS 17—granular, auditable, and forward-looking—is exactly what FP&A teams need to elevate their role from scorekeepers to strategic advisors.

Here’s how:

• Improved forecasting accuracy: IFRS 17’s emphasis on expected future cash flows aligns naturally with forecasting models. By leveraging this data, FP&A teams can build more accurate and dynamic forecasts.
• Scenario planning and stress testing: With consistent valuation models in place, insurers can run “what-if” scenarios across portfolios to assess the impact of market shifts, regulatory changes, or catastrophic events.
• Capital optimization: Understanding the drivers of profitability and risk at a granular level enables better capital planning and allocation, especially important in the context of Solvency II or the Insurance Capital Standard.
• Performance management: IFRS 17 enables more meaningful KPIs that reflect the true economics of insurance contracts, helping leaders make smarter decisions.

 

3. Breaking free from spreadsheets

Despite the complexity of modern insurance operations, many FP&A teams still rely heavily on spreadsheets. While flexible, spreadsheets are prone to errors, lack version control and proper governance, and struggle to scale with regulatory demands.

IFRS 17 is a wake-up call. It demands automation, governance, and integration—qualities that spreadsheets can’t deliver.

By adopting cloud-based forecasting platforms that integrate with actuarial and accounting systems, insurers can:

• Eliminate manual data entry and reconciliation
• Achieve consistency across reporting and planning
• Facilitate real-time collaboration and scenario modeling
• Reduce audit risk and improve transparency

This shift supports compliance and frees up FP&A professionals to focus on value-added analysis rather than data wrangling.

 

4. Aligning finance, risk, and strategy teams

One of IFRS 17's most powerful—but often overlooked—benefits is its ability to align traditionally siloed functions.

Under the new standard, finance, actuarial, and risk teams must work from a common set of assumptions and data. This creates a shared language for understanding performance and risk, which in turn fosters better collaboration and strategic alignment.

For example:

• Finance gains a clearer view of how underwriting and claims trends affect profitability.
• Risk can assess how changes in assumptions impact solvency and capital requirements.
• Strategy can evaluate the long-term viability of products and markets based on consistent metrics.

This alignment is especially valuable in today’s volatile environment, where insurers must respond quickly to emerging risks and opportunities.

 

5. The role of forecasting tools

To fully realize the strategic potential of IFRS 17, insurers require more than compliant systems—they need intelligent forecasting tools that turn data into insights.

Modern platforms, such as Moody’s RiskIntegrity™ Financial Forecast solution, are designed to do just that. They support insurers to:

• Model future financial outcomes under various scenarios
• Integrate IFRS 17 outputs with business planning and budgeting
• Track key performance indicators (KPIs) in real time
• Support board-level reporting and investor communications

These tools enable FP&A teams to move beyond static plans and embrace continuous planning for a more agile, responsive approach essential in today’s fast-changing market.

 

6. Building a future-ready FP&A function

IFRS 17 is just one piece of the broader transformation sweeping through insurance finance; digitalization, evolving customer expectations, and ESG considerations are all reshaping the role of FP&A.

By embracing IFRS 17 as a strategic enabler, insurers can future-proof their finance functions in several ways:

• Scalability: Cloud-native platforms can grow with the business and adapt to new regulations.
• Integration: Seamless data flows between actuarial, finance, and risk systems reduce duplication and latency.
• Governance: Built-in controls and audit trails support compliance and internal accountability.
• Talent development: Automation frees up time for FP&A professionals to focus on strategic analysis and business partnering.

In this context, IFRS 17 becomes not just a compliance milestone but a launchpad for broader transformation.

 

7. Turning obligation into opportunity

The insurance industry has invested heavily in IFRS 17 compliance. Now is the time to extract strategic value from that investment.

By leveraging the data, processes, and tools developed for IFRS 17, FP&A teams can:

• Deliver higher quality and more insightful forecasts
• Align financial planning with risk and strategy
• Support better decision-making at all levels of the organization
• Elevate their role from compliance enforcers to strategic advisors

 

Final Thoughts

IFRS 17 may have started as a regulatory requirement, but it doesn’t have to end there. For insurers willing to think differently, it offers a unique opportunity to modernize financial planning, improve agility, and drive long-term value.

The question is no longer “How do we comply?” but “How do we compete?”

Want to learn more about how to turn IFRS 17 into a strategic advantage? Moody’s is a proven leader in IFRS 17 solutions, with extensive experience in addressing regulatory requirements and driving business insights.

Get in touch and speak to a member of the Moody's team, or visit the website for more information.