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    Addressing the Key Challenge of the Expected Credit Loss / Impairment Calculations

    February 25, 2022

    Addressing the Key Challenge of the Expected Credit Loss / Impairment Calculations

    Insurance Asset Risk Awards 2022 - UK & Europe

    For a second year in a row Moody’s Analytics’ modular, flexible solution to help clients comply with the IFRS 9 accounting standard wins the Insurance Asset Risk IFRS 9 Solution of the year award.

    Moody’s Analytics’ IFRS 9 solution supports implementation of credit loss impairment calculations and integrates with Moody’s Analytics products, as well as clients’ internal systems, to help insurers tackle implementation challenges, in particular with procuring granular data with longer periods of coverage not available in-house to calculate expected credit loss (ECL).

    “As IFRS 9 nears the effective date for insurers, challenges in ECL estimations are many,” Scott Dietz, director at Moody’s Analytics, said. “Data readiness continues to be one of the main challenges due to the amount of data that is required to maintain transparency and auditability.”

    Other challenges include the ability to model credit risk both quantitatively and qualitatively, and forecast economic conditions and their impact, Dietz continued.

    “Insurers should also gain insight from other industries’ challenges, including the ability to scale your process and be flexible to changing conditions and strategies, all while maintaining a balance between compliance, cost, and benefits beyond a journal entry. Having the right partners to help you along the way is paramount.”