Stanbic IBTC Insurance, a subsidiary of Stanbic IBTC Holdings, has achieved a significant milestone by becoming the first Nigerian insurance company to receive approval from the National Insurance Commission (NAICOM) for its 2023 financial report prepared under the new IFRS 17 standard.
This achievement marks a major step towards international alignment for Nigerian insurance companies. IFRS 17, implemented in Nigeria in January 2023, replaces the IFRS 4 model.
Previously, IFRS 4 allowed companies to use local practices, leading to inconsistencies and hindering comparisons between companies across borders.
All insurance companies must upgrade their financial reporting model by switching from the IFRS4 model to the IFRS17 model.
The International Financial Reporting Standard (IFRS17) was released by the International Accounting Standards Board in May 2017 and adopted by the National Insurance Commission. It was also implemented in Nigeria in January 2023.
Because the IFRS 4 model permits businesses to stick with their current local accounting procedures, there will be discrepancies and difficulties when comparing financial statements from various jurisdictions.
As a result, the paradigm hampered comparability and openness and lacked consistency in accounting standards.
Why it matters
IFRS 17 is a paradigm shift in insurance contract accounting, driven by the demand for a more complete and robust standard that could better handle the intricacies of insurance contracts.
The model offers an approach to insurance contract accounting that is transparent and uniform.
Additionally, the model provides a foundation for evaluating how insurance contracts impact an entity’s cash flows, financial performance, and financial condition for those who utilize financial statements, as well as providing easier access to external capital and an increase in foreign direct investment.
Bottom Line
Stanbic IBTC Insurance is the first Nigerian insurer to get approval for its financial report under a new international standard (IFRS 17), marking a shift towards more transparent and comparable financial reporting in the Nigerian insurance industry.
