By Patience Saghana
Nigerian insurance chief executive officers are to gather in Cameroon March this year for a two-day seminar on Global Financial Crisis: Challenges for the African Insurance Industry.
Disclosing this to Vanguard, Ms Prisca Soares, Secretary-General of African Insurance Organisation (AIO) said that African insurance chief executives and their finance officers would extensively see how best the sector could imbibe theÂ International Financial Reporting Standards (IFRS).
According to her, â€œThe adoption of International Financial Reporting Standards (IFRS) will offer important benefits to insurers, including the potential to simplify financial reporting and reduce accounting complexity and the costs associated with this function.
Instead of preparing both Generally Accepted Accounting Principles (GAAP) and statutory financial reports, insurers will ultimately, comply with a single IFRS standard. IFRS also will increase transparency for investors and shareholdersâ€.
The seminar, she reiterates further,Â is for insurance Chief Executive Officers, Finance Directors, Chief Finance Offices of insurance and reinsurance companies, Auditors and Insurance Supervisory Authorities will go a long way to change the way and manner insurance industry present their financial reports.
She expressed,â€œTo ensure readiness for IFRS adoption, insurers must begin to plan today for the business transition and IT infrastructure requirements, evaluating their accounting systems and implementing new processes. While IFRS requires two years of comparatives, best practices call for running comparative ledgers for five years. Nonetheless, the transition to IFRS presents insurers with a valuable opportunity to streamline reporting, expand visibility and reduce reporting costsâ€.
IFRS, she believed, will likely contribute to substantial changes in insurance product design, price and offerings; invest
ment strategy; risk management practices; securitization; and merger and acquisition (M&A) activity. Together, these changes will give rise to pressure for both convergence and divergence across insurance lines, thereby adding complexity and dynamism to the market structure of the insurance industry.
She said the National Insurance Commission (NAICOM), KPMG and Standard & Poorâ€™s would allÂ take African Insurance market through Financial Reporting and Risk Management in line with International Financial Reporting Standards in consonance with the objectives of the AIO.
Deputy Commissioner (Finance) of National Insurance Commission (NAICOM), Mr. George Onekhena is expected to tackle the issue of Key Features of Insurance Contracts Exposure Drafts; Director, KPMG, Johannesburg, South Africa, Mr. Brian Mallinson will insurance practitioners through Transitions to IFRS: Issues for African Insurance Companies.
, Director, Ratings Analytical Financial Services (Insurance) of Standard & Poorâ€s, Paris, France, and Mr Lotfi Elharhdadi will take operators on Enterprise Risk Management while Principal Partner of African Consulting Enterprise, Douala, Cameroon, Mr. Benoit Atangana Onana will tackle International Financial Reporting Standards.
The adoption of the IFRS Soares stated would facilitate a seamless change in the financial reporting of Africa insurers; Explore the key features of the Exposure Draft on the main standard on insurance contracts which is scheduled for publication before the end of 2009 and their implications for the system and business of African insurers; Discuss the elements of Enterprise Risk Management and its role in managing uncertainties and related challenges that African insurers face and to Discuss options available to African insurers for optimizing cost in the wake of current global economic crisis