A major change in the insurance industry over the next few years is the implementation of the new IFRS 17 standard (International Financial Reporting Standards). This is a new way of reporting liabilities. While we used to look at the book value, in the future we’ll look at the market value. At the same time, we need to take account of IFRS 9, which deals with how assets are reported. Given that asset and liabilities need to be balanced, we have combined IFRS 9 and IFRS 17 into a single programme.
These standards have a major impact on the entire insurance chain: from the source systems in which we manage new policies to the reporting systems we use to prepare an annual report. The new standards won’t take effect until 2022. But because a lot needs to change, we’re already putting a lot of work into the preparations. The various business units need to update their own local calculations, models, reports and systems. All these information flows enter Group Finance, where a number of calculations are also made centrally. The reporting flow also has to be adapted to the new requirements. Added to this, the choices we make have a financial impact on the company’s figures. As an IFRS 9&17 programme manager, I look at the overall picture. I hold lots of discussions to understand what’s happening and to take action. Because however good the reports and updates are, I get lots of important information from my discussions with colleagues. So, I’m truly on the front line. And although Group Finance is a corporate services department, we’re really driven to achieve results.
We recently held a three-day conference in Amsterdam with our IFRS 9 & 17 programme with just over 200 colleagues from across Nationale-Nederlanden who are involved in the implementation. The aim was to solve problems together and to share knowledge. Delfin Rueda, NN Group’s CFO, gave a closing speech. All-in all, it was really inspiring.
There’s no doubt that we’ve got other major challenges. One important theme, for example, is what the finance organisation of the future will look like. Is the organisation currently set up to be in control? In the future we want to move to optimal standardisation using artificial intelligence and data science. For a programme such as IFRS 9&17, this means not only that we’ll have to work in accordance with the legislation and regulations in force, but that we’ll also have to set up our systems to be sustainable. This will give us more time to consider the impact of figures, instead of just considering what the figures should be.
The impact of the new IFRS standard on the figures is incredibly important. Fortunately, I’m good at actuarial calculations and quantitative data. I’ve also had various financial jobs: Risk management, lending, insurance, balance sheet management, asset management and finance. The funny thing is that I studied astronomy. So, even with a non-financial background, you can end up in all kinds of interesting financial roles.
There are only a couple of large insurance companies in the Netherlands. The degree of knowledge, expertise and professionalism at Nationale-Nederlanden is remarkable, and clearly a lot more than at smaller companies. But, it’s also in the culture: specialists work here at senior levels, who want to take good decisions based on detailed considerations. What also makes it enjoyable to work here are the opportunities for personal growth and development. Just look at my career.
Sebastiaan van der Laan
Programme Manager IFRS 9&17, NN Group