The Kenyan insurance industry is struggling with the compliance costs of the new reporting standards that came into force in January last year, opening a regulatory nightmare in a market where many players flout capital and reporting rules.
IFRS 17, which replaced IFRS 4, requires a company to measure insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to such deals.
The new accounting standards target transparent reporting about an insurer’s financial position and risk.
A new study by consultancy firm Deloitte covering Kenya and other East African countries says many companies with limited budgets are facing challenges in the implementation of the new reporting standards.
“Many companies are struggling to meet the stringent requirements, facing underestimated budgets, limited access to expertise needed for successful implementation, and inadequate technology and data infrastructure,” according to Insurance Outlook Report 2024: Navigating the Headwinds dated February 2024.
