It is a critical moment for the insurance industry as various economic, regulatory and market guidelines are the driving forces of change in the industry. Since Solvency II came into effect in Europe in January 2016 insurance entities are now preparing for a fundamental review of their accounting practices under IFRS 9 and IFRS 17 and its implications for their business.
In addition, the adoption of Model Risk Management (MRM) practices has become more widespread among the insurers, particularly in the US market, as banking supervisory entities are advocating their implementation. This is likely to have a cascading effect on insurers because MRM practices are being actively adopted by insurers given this regulatory emphasis. Also in view of the advantages of embracing effective MRM frameworks by the banking sector, the insurance sector would follow the lead to adopt the best practices.