STAR, Tunisia's Leading Insurer, Launches International Call for Tenders for IFRS 17 Solution
STAR, Tunisia's leading insurer, has launched an international call for tenders to acquire and implement an IFRS 17 solution. The deadline for submission is January 27, 2025. One of the conditions is the requirement for a provisional bank guarantee of 5,000 TND, valid for 120 days. For more details, please visit this link
This international accounting standard deals with insurance contracts and has far-reaching implications beyond mere accounting. Effective as of January 2023, it has led to profound changes in financial communication and performance management for insurance groups. There is also an operational impact on data, systems, and processes. Even the definition of an insurance contract has been modified. The ultimate goal is to ensure maximum transparency of financial statements for investors.
Among the most significant changes is the introduction of the Contractual Service Margin concept in liabilities. This requires insurers to allocate profits over the entire contract duration. The margin is released, according to defined coverage units, as the insurance contract is executed. Furthermore, the application of this standard has led to the constitution of more significant technical provisions, which will impact technical profits.
The implementation of IFRS 17 will lead to improved financial health and sustainable profitability for STAR. The installation will be progressive and take years, as it involves setting up a new internal organization. This is all to the benefit of Tunisia's financial industry, which will be able to align with international best practices.
