The IAS Learning Curve

Enormous challenges lie ahead as the life industry prepares to adopt international accounting standards, now officially known as international financial reporting standards. Without question, the industry expects IAS to produce significant changes in the pattern of reported earnings and in their volatility, as well as increased volatility in reported equity. In Phase I, executives will have to fundamentally change the way they think about the business and assess its performance. In Phase II, that challenge will be magnified by the anticipated requirement for fair-value reporting of liabilities. At this point, however, insurers appear to be devoting little attention to the need to define and enhance their financial planning and analysis methodologies. Nothing less than a full redefinition of how the new financial information will be embedded in business management processes will be needed during the next several years.