Malaysia: Insurers need to review strategies on the adoption of MFRS 17

The adoption of MFRS 17 (Malaysian Financial Reporting Standard 17) for insurance contracts, which comes into effect for annual reporting periods beginning on, or after 1 January 2023, is expected to have a significant impact on the fundamentals of the insurance business and its financial management. It is thus critical for insurers to review their strategies to ensure they adapt post–MFRS 17, says Deloitte in a commentary published by local media. MFRS 17, issued by the Malaysian Accounting Standards Board (MASB), is equivalent to the IFRS 17 Insurance Contracts as issued and amended by the International Accounting Standards Board (IASB). The aim of MFRS 17 is to increase consistency, comparability, and transparency in financial reporting across the insurance industry. However, the implications on the insurer’s financials and operations will vary from company to company, making the transition to MFRS 17 and management post-implementation more challenging.