If I could characterize the past year, it would be the time when “the rubber met the road.” ACORD XML Standards and real-time delivery capabilities truly came off the paper of theory and into the realm of reality, impacting agents and their carriers in a big way.
In just the last year alone, 44 new XML messages for property and casualty business have been developed, in addition to the build-out of several other messages, bringing the total number available to 644.
As a result of all of this activity, some interesting trends have also emerged. Were seeing carriers and solution providers gaining greater appreciation for the impact XML standards can have internally, helping to connect the many different systems together. It has already been established that systems integration can often be the difference between a successful partnership and one that fails. The “go” or “no go” decision in a merger or acquisition deal sometimes hinges on whether the new, larger entity will be able to operate smoothly or suffer from prolonged and “resource-draining” incompatible systems.
Fortunately, one trend we see is the recognition by carriers that building those linkages to connect disparate internal systems based on industry XML standards is a way to truly achieve a positive return on investment in information technology. A new system that leverages standards to integrate existing systems, once youve completed the first project, only grows in value. The more disparate systems that link through standards, the greater the value, and since its reusable, the cost savings increase. Since integration is inevitable, some companies have realized that theres no time like the present to begin implementing standards.
More and more of the case studies ACORD publishes have to do with new systems integration projects. Those “first movers” are showing the rest of the industry that “getting from here to there”, from the costly mindset of point-to-point solutions to the open standards-based “any-to-any” flexibility, can only be achieved with a long-term vision. And like any journey, it begins with a first step.
Another trend we see is in the projects many are choosing to tackle. The frustration many companies felt early on in the rollout of industry XML standards is fading. Because of the nature of these standards, implementation can begin slowly and on a small scale. Everything doesnt have to be done at once.
And where did companies find the biggest return on investment? They found it in the wishes of agents. One of the key findings coming out of the AUGIE Agency Survey last year was the need for real-time transactions. In fact, the billing inquiry standard was submitted for development in June 2002 and just approved last November, as a result.
For many companies, finding an implementation project that will result in a wide adoption by agents is essential now, since many companies invested millions of dollars in upload projects that few agents used. So billing, claims, policy, etc. inquiries have become the current area of development. Fortunately, standardizing the inquiry business messages and utilizing XML to do it real-time has a significant impact on the bottom line for agents and improves customer service, too.
Inquiries tend to be very labor intensive and time consuming. Hundreds of thousands of claims and quotes are processed on a daily basis, so it stands to reason that moving towards a quicker and more efficient electronic transaction process is extremely beneficial in meeting or exceeding customer expectations. Much in the same way the banking industry took a costly and time consuming transaction through the teller and dropped the cost down to pennies and the time to seconds through the widespread installation of ATMs and their related standards, insurers are taking the cost out of inquiries.
When, through standards, carriers are able to take what normally is a minimum transaction of about 5 minutes (often more when a CSR is unable to connect with the right company person) down to 5 seconds by having the information gathered automatically, everyone wins. Companies win because they dont have to have a live person respond to the inquiry. Agents win because they spend less time on a highly repetitive daily task. And consumers win because they get the information they want, when they want it, without having to wait. All of this contributes toward enhancing the overall customer/client experience.
So the movement by companies toward real-time, standards-based transactions is possibly a sign that all of the partners in the insurance value chain recognize that collaboration can lead to synergies. Those companies that offer their agents standards-based solutions are presenting themselves as “easy to do business with,” a key element in the placing of business.
Collaboration in standards development is also a growing trend in and of itself. Whether its the more than 400 volunteers that make up the working groups, subcommittees and steering committees that drive ACORD industry standards growth and implementation, or the dozens of other standards organizations around the world with whom ACORD participates, collaboration within the insurance industry is very strong.
ACORD recognizes that there are many standards throughout the world that have been very successful in addressing the local needs of their respective domestic markets. And where these standards exist, ACORD takes steps to ensure its standards are compatible and harmonized with them.
So, as the development and growth of industry standards continue, the ways in which companies will implement and utilize them will evolve.
is vice president of standards for ACORD based in Pearl River, N.Y.
ACORD developed 44 new XML messages for property-casualty in the last year, bringing the total to 644 in all With agents
wishes in mind, current development areas are billing, claims and policy inquiries.
Reproduced from National Underwriter Edition, May 19, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.