Annual report backlog grows as insurers grapple with new accounting rules
Poor documentation and integration across systems made it challenging to trace reported figures back to the underlying data and assumptions, further complicating compliance.
Kenya’s insurance sector continues to face setbacks in releasing annual financial reports as firms grapple with the demands of the new accounting standard, IFRS 17.
The regulation, which replaced IFRS 4 at the start of 2023, represents one of the most extensive changes in insurance accounting in twenty years.
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Despite being two years into implementation, many insurers are still struggling to meet reporting deadlines.
The Association of Kenya Insurers (AKI) says IFRS 17 requires insurers to report data at a much more detailed level than before, a task made difficult by missing information and outdated technology.
According to AKI’s latest report, historical data were often incomplete, inconsistent, or spread across old IT systems that could not support the complex modelling needed under the new rules.
These challenges have caused delays in publishing financial results for the year ended December 2024, and some of the backlog has spilt into 2025 as insurers work to fill data gaps and integrate new systems.
Kenyan law requires insurers to submit financial statements within four months after the year ends, but many firms, including Jubilee Holdings, CIC Insurance Group, and Kenya Reinsurance Corporation, had to request extensions due to IFRS 17 complexities.
“Post-implementation of IFRS 17, insurers encountered significant challenges related to data granularity and availability. The requirement to group contracts by portfolio, issue year, and profitability level meant that insurers had to access and report at a far more detailed level than previously required,” AKI says.
AKI explains that legacy systems and missing data forced companies to conduct “extensive data remediation” and make major investments in modern data infrastructure, governance frameworks, actuarial engines, data management tools, cloud storage, and integration software.
The costs have been particularly challenging for smaller insurers.
“Many insurers experienced misalignments in data definitions, assumptions and timing of inputs across departments. This lack of synchronisation led to reconciliation issues, delayed reporting cycles, and inconsistencies in financial outputs,” AKI notes.
Auditors also raised concerns about traceability, as some firms struggled to link reported figures back to original policy-level data. To meet audit standards, companies had to manually reconcile gaps, re-run models, or rebuild data pipelines.
The lobby also highlights that insurers found it difficult to compare expected and actual cash flows, a key IFRS 17 requirement, due to timing mismatches, system limitations, and gaps in historical assumptions.
Poor documentation and integration across systems made it challenging to trace reported figures back to the underlying data and assumptions, further complicating compliance.
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