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In a significant stride towards international financial reporting standards, Stanbic IBTC Insurance, a subsidiary of Stanbic IBTC Holdings, has emerged as the first insurance company in Nigeria to have successfully obtained vetting and approval from the National Insurance Commission (NAICOM) for its 2023 full year financial report.
As the first insurance provider to receive such vetting by the industry regulator, this achievement comes on the heels of the insurance company’s adoption of the International Financial Reporting Standard (IFRS) 17 standardization process, showcasing its commitment to transparency and adherence to global accounting practices.
The International Financial Reporting Standard (IFRS17) which was issued by the International Accounting Standards Board in May 2017; implemented in Nigeria in January 2023 and adopted by the National Insurance Commission, mandates all insurance firms to upgrade their financial reporting model by migrating from the IFRS4 model to the IFRS17 model. The IFRS 4 model allows companies to continue using existing local accounting practices, leading to inconsistencies and challenges in comparing financial statements across different jurisdictions. Thus, the model lacked uniformity in accounting practices as well as hindered comparability and transparency.
Spurred by the need for a more robust and comprehensive standard that could better address the complexities of insurance contracts, the IFRS 17 represents a paradigm shift in accounting for insurance contracts. The model provides a consistent and transparent approach to insurance contract accounting. The model also gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance and cash flows; as well as provides easier access to external capital and an increase in foreign direct investment. The new standardization process, the IFRS 17, includes the preparation of the 2023 financials along with the restatement of the 2021 and 2022 financial statements.
Commenting on the feat, Akinjide Orimolade, Chief Executive of Stanbic IBTC Insurance, noted that the vetting by NAICOM is a testament of Stanbic IBTC Insurance’s commitment to international financial reporting standards, while giving stakeholders a clear understanding of its financial position and performance.
“Being the first insurer to have our financial report vetted by NAICOM, following the adoption of the IFRS17 standardisation model, is a testament to our unwavering commitment to international accounting standards. This milestone reinforces our dedication to transparency, trust, and operational excellence” said Orimolade.
The insurer noted that the adoption of the IFRS 17 standardisation model of financial reporting by Stanbic IBTC Insurance underscores the company’s dedication to upholding international financial reporting standards. It noted that by aligning its financial reporting with this internationally recognised framework, the insurer is not only demonstrating its commitment to transparency but also aiming to instill confidence in its stakeholders.
“The adoption of the IFRS17 Standardisation Model not only enhances the quality of our financial reporting, but also signifies our proactive stance towards aligning with global best practices. By embracing international accounting standards, we aim to set a high benchmark for transparency and integrity in the insurance industry” Orimolade said.
The Stanbic IBTC Insurance Chief Executive also noted that in a dynamic and rapidly evolving insurance landscape, the organistion’s commitment to international accounting processes sets a positive precedence for the industry. By promoting transparency and adopting best-in-class standards, the insurer is well-positioned to navigate challenges, drive sustainable growth, and deliver value to its customers and shareholders.
“Our commitment to industry standards of reporting goes beyond compliance – it reflects our vision to drive sustainable growth and build long-term trust with our stakeholders. The adoption of the IFRS 17 framework underscores our dedication to operational efficiency, accuracy, and the highest levels of financial governance” he added.
Overall, Stanbic IBTC Insurance’s successful vetting and approval of its financial report by NAICOM reflects the company’s steadfast dedication to operational excellence, regulatory compliance, and stakeholder confidence. As the insurance sector continues to evolve, such initiatives underscore the importance of embracing global accounting standards to foster trust, transparency, and long-term success in the industry.
