Inside the IFRI Certificate ProgramQ&A with Darryl Wagner, FSA, MAAA, principal at Deloitte Consulting February 2022
The Society of Actuaries’ (SOA’s) International Financial Reporting for Insurers (IFRI) Certificate Program was successful right from its launch. Can you tell us a bit about the initial thought process behind the project?
International Financial Reporting Standard (IFRS) 17 is a new global financial reporting standard for insurers that will impact actuaries around the world, including those working with global insurance organizations in non-IFRS reporting jurisdictions like the United States. The SOA’s IFRI Certificate Program is a great example of the SOA serving the educational needs of its global members in areas of strategic importance to both SOA members and their employers. As such, the SOA enthusiastically took on this endeavor, which represents the intersection of the SOA’s international reach and strategy, member-centric philosophy and strong brand as a global actuarial education organization.
How long did it take to set up the project team?
The actuarial profession, which includes many U.S.-based actuaries and SOA members, has been closely following and involved in the promulgation of IFRS 17 for many years, starting long before the standard was issued. Examples of this involvement include comment letters issued to the International Accounting Standards Board (IASB) by the International Actuarial Association (IAA) on behalf of its member actuarial associations, and the publication of the SOA textbook entitled International Financial Reporting for Insurers. This industry involvement is in addition to the work actuaries are doing to help their organizations and clients implement IFRS 17.
Thanks to these efforts, the SOA was able to identify and recruit a group of volunteers to serve on the project team quickly. We also were able to leverage the team’s broad network to enlist the participation of several accountants with deep interest in and knowledge of the topic.
What was the structure of the project team, and how long did it take to complete the pilot program?
As is typical for projects like this, the SOA established a project oversight group (POG) to help shape the initiative and provide input and advice. I was honored to be asked to be a part of the POG alongside SOA and accounting colleagues who had expertise in this area and a passion for education.
As the course was planned and developed, we met regularly over a nine-month period with the SOA project team and external consultants. Following the content development, a pilot of the IFRI course was carried out with roughly 30 participants.
What motivated you to volunteer for this program? What has your experience with this project been like?
My actuarial career has revolved around measuring and reporting the performance of insurers and insurance business. International involvement also has been a theme of both my day job and professional activities—I served for several years as one of the presenters for an IFRS 17 educational seminar for actuaries in Hong Kong, sponsored in part by the SOA Financial Reporting Section.
Thus, the IFRI project sits at the intersection of my personal interests in financial reporting, international actuarial practice and education. When presented with the opportunity, I quickly said yes. I find the most rewarding volunteer experiences are those that resonate with both your expertise and passions.
How can this program help actuaries implement IFRS 17? Would you suggest that professionals outside of the actuarial industry enroll in this program as well?
IFRS 17 brings significant changes to the accounting and reporting framework for insurers. And, as with any insurance accounting framework, actuaries play a critical role in both producing the “numbers” and explaining what they mean. Under IFRS 17, actuaries and accountants will need to collaborate more than ever before. This all translates into significant opportunities for actuaries—not just to execute on IFRS 17 requirements, but to work with finance and technology teams to navigate the transformation to IFRS 17 and help impacted insurers and their stakeholders understand the story of their business as told in the new language of IFRS 17. The SOA’s IFRI Certificate Program will help actuaries step up and deliver on this opportunity.
I recommend this program to nonactuaries as well. While actuarially focused, the program is broad and will benefit other professionals, whether they be “producers” or “consumers” of IFRS 17 information and results.
I also see a wider benefit for actuaries beyond the specifics of IFRS 17. As I’m sure most actuaries reading this are aware, U.S. generally accepted accounting principles (GAAP) for insurers also are fundamentally changing in the form of long-duration targeted improvements (LDTI). While IFRS 17 and LDTI differ in many ways, they move in the same general direction and encompass many of the same components. The learnings from the IFRI program will aid actuaries working with LDTI and other changes to the financial reporting processes and functions that insurers may undertake in the coming years.
How did you structure the overall program? Did you face any major difficulties while planning this program? If so, how did you overcome them?
The program is structured in modules that deal with different aspects of IFRS 17. The modules build on one another, and knowledge checks are embedded throughout the program to confirm the learning and understanding of program participants.
The major difficulty we faced with this program was the breadth and complexity of IFRS 17. We spent significant time upfront discussing the best way to parse and organize the material, as well as which topics were critical to include. Our thinking was grounded in the structure of the SOA’s IFRI textbook, but we designed an interactive learning program. This ultimately led to a curriculum that I believe is rightsized and well organized.
Besides IFRS 17, the certificate program includes other accounting standards, such as IFRS 13 Fair Value Measurement and International Accounting Standard (IAS) 34 Interim Financial Reporting. Why were these other accounting standards included?
IFRS 17 addresses accounting for insurance contracts, notably the liabilities related to such contracts. When an insurer produces financial statements under IFRS 17, they also will be employing other IFRS pronouncements that deal with topics such as investment accounting, fair value and business combinations. It is important that actuaries working with IFRS 17 understand the larger context for their work. Therefore, we included primer-level information on these other topics. This is also an important reason why the IFRI program will be of interest and value to nonactuarial professionals.
What challenges did the project team face due to the ongoing pandemic, and how did you overcome them?
The POG was formed and carried out its work during the pandemic. Like others around the world, we met and worked together virtually. While virtual work is not always ideal, our team did a great job of advancing this project, which required a lot of brainstorming and creativity. I would like to acknowledge the SOA staff manager for the IFRI project, Ben Marshall, FSA, CERA, FCIA, MAAA, J.D., who did a great job of professionally and inclusively facilitating our conversations.
What was the response from the pilot program participants? Were any major changes made based on their feedback?
Beyond serving on the POG, I had the opportunity to be a live instructor for the pilot group of IFRI participants. The participants with whom I worked had favorable feedback on the program. These individuals also offered valuable comments on the program content, which were instrumental in improving and finalizing the program. These comments were gathered through surveys after each module, the seminar and final assessment, as well as through a facilitated end-of-course focus group discussion.
Can you describe the process of inviting or selecting the pilot program participants?
The pilot program was announced in an email to a wide array of SOA members who practice financial reporting internationally, along with a posting on the SOA website. Recipients were invited to apply for entry into the program by answering a set of questions on the application form. Selection criteria were established in advance to make sure we got an appropriate cross-section of participants in the pilot group.
Once the applications were submitted, the answers to each question were assessed in relation to the selection criteria. Ultimately, we selected a diverse group of participants across many nations, employers, practice areas and experience levels.
In hindsight, were there things you wish had been done differently? Do you have any suggestions for future improvements in this program? Are there any other upcoming topic areas that would be a good fit for designing a similar program in the future?
I don’t have much in terms of things I wish had been done differently. I applaud the SOA for addressing the educational needs of actuaries in this important and emerging area of practice.
As for future efforts, we should continue to scan for and target the most significant areas of change and transformation that affect SOA members and their employers. I look forward to many more focused and successful educational programs like IFRI.
How do you see the role of actuaries changing once IFRS 17 is fully implemented?
First of all, actuaries will be working with a new standard of accounting, or as I like to think of it, speaking a different language when it comes to telling the story of how an insurance operation is performing. This brings with it new concepts and theoretical challenges that will continue to fuel robust discussion and research. Actuaries also will be working with and responsible for new processes and technology platforms, such as subledgers needed to report under IFRS 17. As mentioned previously, actuaries and finance professionals will be collaborating more under the IFRS 17 framework. The complexity of IFRS 17 requires that the results are clearly understood and explained in such a way that they fulfill their mission of telling the story of an insurer’s business to both internal and external stakeholders.
This all points to opportunities for actuaries—opportunities to not only become deep experts in IFRS 17, but also to better understand the insurance businesses they serve and the finance operations and processes that support them. There also will be opportunities to more closely team up with accountants and other nonactuarial colleagues, as well as opportunities to further communication skills to help finance and business leaders understand and convey the meaning of results under this new accounting framework. I also see the opportunity for actuaries to help drive and be part of other transformations that inevitably will follow IFRS 17 implementation. I see a bright future for the actuarial profession, and IFRS 17 is a great example of the opportunities actuaries must embrace to make that future a reality.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
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