By Favour Nnabugwu
Kenyan insurance firms will face high costs in working to meet International Financial Reporting Standard (IFRS 17) that comes into effect on 1 January 2023.
To help them, the Association of Kenya Insurers (AKI) has hired a consultant to carry out a survey on the level of preparedness of Kenyan insurers to comply with the requirements of the IFRS 17.
To comply with IFRS 17, insurers may have to double their capital and shift all non-quoted investments into a holding company, reported The EastAfrican.
Mr Nizar Juma, the group chairman of Jubilee Holdings, told the weekly regional newspaper, “We need money because we are moving from a 100% capital adequacy ratio requirement to 200%, which means we are almost doubling our capital.”
The consultant — Kenbright Actuarial and Financial Services — is expected to release the findings of the survey soon.
Mr Tom Gichuhi, AKI’s chief executive told The EastAfrican, “We expect the report probably in a month or two months. The reason why we are carrying out this survey is because companies are at different levels of compliance.”
“We want to find out who is at what level so that we know what kind of interventions to make, for instance, organising training programmes and ensuring that the staff of these companies understand the requirements of IFRS 17 and how to comply with them,” he said.
The implementation of the accounting standards has been delayed by one year due to the COVID-19 pandemic.