The overwhelming financial reporting requirements in the insurance industry often leave many financial professionals scratching their heads and dreaming of a better way. In a heavily regulated industry, insurers have faced a daunting task to provide one set of reporting requirements for the regulatory side and another for the capital markets. The Sarbanes-Oxley Act and recent SEC requirements that have accelerated filing deadlines for both quarterly and annual statements have exacerbated the financial reporting nightmare. While the burden to provide timely and accurate financial reports lies within the accounting community, these overburdened workers are looking to IT for the much-needed help to leverage technology for a better, faster, cheaper path to financial reporting and analysis.

E-mail certainly has helped speed the distribution of financial information. However, the financial community has remained frustrated by the lack of data standards for the exchange of information, resulting in inefficient reporting processes. Lack of a common data format for financial information has resulted in the data being distributed in a variety of formats. These noninterchangeable formats typically include HTML, Excel, and PDF, with virtually no easy way to consolidate the data for analytics, reuse, or alternate reporting needs. Financial data is left in a state roughly equivalent to a photocopy with no easy means to import the data into other electronic formats. The typical workaround has been to rekey the data as needed or turn to IT with requests for yet more financial reports to develop and maintain. The former is labor intensive and prone to error, while the latter is just more distraction and additional tasks for the ever-growing IT to-do list.

Given the state of financial reporting and the increased scrutiny and personal responsibility introduced by Sarbanes- Oxley, there may be no better time than the present to take a look at the emerging standard for financial data, eXtensible Business Reporting Language (XBRL). Insurance is an industry that traditionally has gravitated toward standards as a way to lighten the load, reduce risk, and refocus available time and energy on the business of insurance. The XBRL standard promises to offer the insurance industry many of these opportunities for operational efficiency.