Today, our interviewee is Inara Mirhasanova, a member of the Board of PASHA Insurance.

Mrs. Inara, according to the information we received, PASHA Insurance Company has recently switched to the IFRS 17 standard, which has been applied worldwide since this year. We congratulate you on this occasion and we would like you to answer the questions of interest in this direction.

- What is IFRS 17 in general? Can you give a brief overview of the standard? What are the main purposes of IFRS 17 and what is the reason for PASHA Insurance to switch to this standard?

As you know, as PASHA Insurance, we strive to meet high quality and solvency standards, adhering to our position as a reliable insurance company. With this in mind, all our financial statements have been prepared in accordance with international standards (IFRS) for years. One of the main standards was IFRS 4, which governs insurance activities. But taking into account the unexpected events and other risks happening around the world, the International Accounting Standards Board published the new IFRS 17 standard after many years of research. As a result, from January 1, 2023, the old IFRS 4 standard, which regulates insurance activities, became invalid and it was decided to apply the new IFRS 17 standard.

- How long did the transition process to IFRS 17 take in general?

Since we were aware of the difficulties of the standard in advance, we started the transition process from 2021. First, the methodology of the standard was written, and then the software was purchased for the calculations and the requirements of the standard were noted. As a result, our company formed the annual reports of 2023 based on the requirements of this standard.

- Can you share the difficulties you faced during the transition period? How did you implement the transition to the standard? Since this experience is the first in Azerbaijan, we assume that foreign consultants were involved in the project.

We already knew that the standard was complicated. That's why we prepared our first-of-its-kind transition plan to the new standard. In order to achieve a successful result, we have built our action plan in several directions. At the beginning, one of our main goals was to build a strong team of professionals. I think that thanks to this team, we were able to cope with the project properly.

Of course, for the implementation of such an innovation, consultants were involved in our company. They helped us adapt new software and methodology.

The main difficulty was the time limit. If we look at European countries, leading insurance companies started the transition to the new standard before the pandemic. And we aimed to do it quickly. The second difficulty was that no insurance company in the world had experience in this field. We could find theoretical, not practical, answers to the questions that arose during the project. But despite all this, we managed to achieve a successful result in the end.

- What is the difference between the previously applied IFRS 4 and the new IFRS 17 and can you tell us about the advantages of the newly applied standard?

Because there are many technical points in the standard, it is difficult to answer this question without using certain terms. Simply put, IFRS 4 was more about assessing the current state of an insurance company. The new IFRS 17 standard also requires taking into account all future risks. It also formalizes additional capital for those risks. This further strengthens the company's financial position and strengthens its solvency. Although all the listed steps can have a negative impact on profits, PASHA Insurance was open to these changes, guided by the trust of customers.

- Would you recommend other financial institutions to switch to this standard?

I think that one of the goals of all insurance companies in the country is to create a reliable reputation. The new standard serves exactly this purpose. I believe that the implementation of IFRS 17 will create a more transparent, stable and risk-based environment. Taking into account the points I have listed, I certainly recommend the transition to the IFRS 17 standard to other market participants. As a PASHA Insurance company, we will continue to offer the most optimal solutions for our customers and bring innovations to the market, adhering to our quality value.