Data standards could prove to be a significant benefit to the life reinsurance industry, if only more companies would adopt them, according to several speakers at a recent meeting.
At a session during the ACORD LOMA Insurance Systems Forum here last month, Lloyd Chumbley, ACORD assistant vice president of standards, noted that prior to last year, much of the implementation of data standards among life reinsurers and ceding companies was occurring “below the radar.” In fact, he said, much of the discussion at a meeting in 2005 revolved around what became known as the “silent implementation” of standards within the life reinsurance community.
During that meeting, participants agreed that more focus needed to be put on promoting life reinsurance and, he added, the issue has made some progress.
“As a result of that, in the past year a lot of things have moved above the radar,” Chumbley said.
But a great deal of work remains to be done, according to Leroy McCarty, vice president of reinsurance operations for Transamerica Occidental Life Insurance Company.
In the past, he said, the implementation of data standards in life reinsurance has been slowed by two major obstacles. First, he said, reinsurers and ceding companies were unable to reach any consensus on what standards were necessary and which were more of a luxury.
Second, McCarty explained, “cedents weren’t willing to spend any time and money” on implementing standards, and reinsurance companies did not have the leverage to force the change.
As a result, McCarty said, data standards implementation “isn’t a reinsurer problem” for the life industry, but “it’s a cedent problem.”
But the times are changing, he added, and “reinsurers are in a much better position to say ‘you’re going to have to do it; you’re going to have to get on board,’” with data standards.
Transamerica has been working to implement ACORD’s XML data standards, and McCarty said the process has produced several significant benefits, not the least of which is what he called “tangible goodwill,” among the company’s reinsurers.