Middleware, XML, Web services should prompt a shift in focus
By Ara C. Trembly
Some months back, I and several other editors at National Underwriter were having an informal conversation with executives from Lloyd’s, when I heard something I couldn’t quite believe.
Julian James, director of worldwide markets for Lloyd’s, made an interesting point about the perceived need for data standards to electronically enable transactions in the insurance industry. He pointed out that insurance transactions are already being completed across proprietary information systems thanks to middleware (software that does the translating on the fly) and advanced technologies like XML and Web services that enable such software to be developed.
In other words, while the industry has been beating its chest about the need for standards that allow disparate systems to understand each other, the software developers have done an end run and enabled the transactions despite the proprietary nature of many carrier systems.
Judy Johnson, vice president of insurance strategy at Sapiens in Research Triangle Park, N.C., and a longtime insurance industry analyst, agrees. “Standards are a good thing, but ultimately technology is making that somewhat of a moot issue,” she stated. “In the medium-to-long term, ACORD standards are largely irrelevant.”
The lone exception to that idea, she noted, is where the insurance industry is going into convergence with financial services.
The financial services industry has “certain standards, and where insurance tends to play in that arena, they are going to have to move toward those standards,” she explained. “Convergence is more of an issue than the insurance value chain moving itself.” The overall financial services industry is “leading in the area of standards, and they have a lot more invested.”
As technology continues to evolve, Ms. Johnson continued, the issue of how a message “looks” is going to be less important. “And it needs to be that way if we are going to move toward the real-time world,” she said. “Especially for big life and p-c [insurance] companies, the pressure is intense to move into real-time to get things done in a reasonable time frame that people can accept.”