##bility between insurers. this in turn weakens market discipline. the harmonisation of insurance contract measurement approaches across the globe brought about by ifrs 17 is therefore timely, if not long overdue. the measurement of insurance liabilities using current market prices will bring about a closer alignment between the assets and liabilities on an insurer ’ s balance sheet. and with a clearer demarcation between underwriting and investment profits and the recognition of profits over the lifetime of a contract rather than at a single point in time, ifrs 17 will also paint a more accurate picture of an insurer ’ s performance. these improvements will increase the relevance and utility of financial information provided to investors, financial advisers, insurance risk managers, businesses and individuals to inform investment and purchasing decisions. as a result, markets should work better to reward prudent and profitable performance, and appropriately penalise risky and poor performance. this is positive both for financial stability and the efficient allocation of economic resources. improving alignment between business units and financial management bank negara malaysia also expects ifrs 17 to be a key catalyst for insurers to review, if not overhaul, business processes across the organisation. this will be driven by at least three factors. first, the need for business units to capture broader and more granular information required for financial reporting. second, changes in the way performance is measured under the new standard. and third, increased opportunities for institutions to differentiate themselves from the competition, helped by a more integrated view of performance. these considerations will have wide implications for insurers ’ organisation structures, data capture, infrastructure and systems, 2 / 5 bis central bankers'speeches risk management, and product design and development. at present, many insurers are operating on multiple, fragmented legacy systems – including largely separate systems supporting the finance, investment and actuarial functions. systems for regulatory reporting and compliance are also often separate in a number of institutions. as insurers begin to prepare for the reporting of insurance liabilities under the new regime, ifrs 17 will create both a need and the opportunity for insurers to strategically re - think information flows across the organisation – not only to improve efficiencies in financial reporting and mitigate operational risks, but also to capture synergies that will improve business and compliance outcomes. this includes leveraging on data analytics to support more refined pricing, elevate investment and treasury operations, and achieve greater capital efficiency. risks will also shift into sharper focus.

regulatory prescriptions or 3 / 5 bis central bankers'speeches guidance – particularly in the early phases of implementation. over time, we expect stronger governance within insurers to reinforce associations between financial reporting and fundamental economic factors, as intended by ifrs. in malaysia, the finalisation of ifrs 17 is indeed timely in the light of current reforms being undertaken by bank negara malaysia to further develop the domestic insurance market. this will see greater competition and complexity in the insurance sector, alongside a renewed impetus for growth through channel diversification and digitalisation. in this environment, the implementation of ifrs 17 will have an important role in improving the quality of information provided to the market on how these developments impact the performance of insurers, and in strengthening foundations for sound governance and risk management. this in turn will promote the effective functioning of insurance markets to serve the economy. early preparation is key so then, where do we stand today? with less than two and a half years before the implementation date sets in, how prepared are insurers to implement ifrs 17? the answer is not encouraging. a recent survey published in january this year by a software firm covering some 240 insurance companies spread around the world, found that a startling 92 % of insurers had yet to start putting solutions in place. among those that have started, a vast majority are still only in the initial stages of planning. while there is still some time before the first reporting period under ifrs 17, it would be a grave mistake to leave things too late given the scope and enormity of the issues that that need to be addressed. this is compounded by the prospect that insurers that are late to the game are likely to face an acute skills shortage as first movers draw down a limited pool of qualified actuaries, it specialists, software and systems vendors and technical consultants. in malaysia, early steps have been taken by bank negara to engage the industry on the development of broad implementation plans. that said, the granularity of the plans and implementation progress remains uneven across insurers and takaful operators. recognising the complexity and wide - ranging implications of the new standards, several industry technical working groups have been established in coordination with the actuarial society of malaysia to examine key issues and provide recommendations on the implementation of ifrs 17. we have also conducted a first preliminary round of quantitative testing, which was intended to help insurance companies gauge the potential impact of the new standards on