U.S. Insurers Concerned New International Accounting Standards Will Lead To Volatile Financial...

Business Editors

NEW YORK--(BUSINESS WIRE)--March 25, 2002

Ernst & Young LLP today announced results of a survey of U.S. insurance executives regarding new International Accounting Standards (IAS).

The survey identified volatility of financial results, impact on profit

The European Commission has mandated that by 2005 all listed European Union (EU) companies must report consolidated accounts under IAS. The European Parliament also endorsed this broadly last week when 492 out of 526 votes were cast in favor of the global initiative to standardize accounting procedures and financial language. This has significant implications for companies worldwide especially given the support of national standard setters towards "convergence."

Encouragingly more than two-thirds (67%) of companies have someone tracking developments of the International Accounting Standards Board (IASB), the organization leading the global effort to transform financial reporting requirements. In addition, almost half (44%) have someone within their organization participating on IAS related committees and almost a third (30%) have developed an internal task force on IAS.

"Insurance executives in the U.S. are just beginning to realize the potential implications of IAS standards on their organizations," said Mike McLaughlin, Director of Life Actuarial Services, Ernst & Young LLP. "With 2005 around the corner and the SEC endorsing the objectives of the IASB, there is a lot of work to be done, and companies are increasingly recognizing this is the case."

Over 40 executives from 27 U.S. based insurance organizations participated in the survey conducted during Ernst & Young's recent seminar, "Insurance Accounting in the 21st Century" held in New York City.

Ernst & Young LLP has more than 84,000 trusted business advisors, operating in more than 700 cities in 130 countries. Ernst and Young has created a global task force of actuaries and accountants dedicated to helping insurance organizations understand the impact of IAS related issues. For further information about the task force, please contact Emma McWilliam at emma.mcwilliam@ey.com.