ACORD is playing a vital role in the growing international insurance market as the organization responds to increasing requests from overseas groups to provide information about its standards and messages. Australia, India, South Africa and Russia are all markets in which ACORD has expanded its effort, according to ACORD executives.

The Russian market is especially interesting because of its great potential, says Puneet Bharal, head of implementation services for ACORD. The organization was contacted back in 2007 when “the market in Russia was just getting used to competition and de-nationalization,” recalls Bharal. “Insurance was a brand-new industry, and companies wanted traction and growth.” Now, however, the Russian market is becoming more sophisticated and is more focused on achieving greater workflow efficiencies, improving operational efforts, and enhancing business-to-business (B2B) operations.

Bharal adds that in August 2011 ACORD was invited back into the Russian market by the country's insurance trade association to get involved in streamlining accounting, settlements and claims processing. ACORD is currently helping implement systems for electronic back-office operations (ELOT) and electronic claims office transactions (ECOT). ACORD also is helping establish a centralized aggregation website which would allow client access to comparison quotes for the insurance industry.

The effort is not without difficulty. “One of the key challenges is that all of our core guidance documentation is in English, and we are in the process of translating it into Russian now,” Bharal says. The translation effort could last three years. “We are also developing a marketing hub for reinsurance and primary P&C insurance,” he says.

Bharal adds that ACORD sees its role expanding in Russia. “They identify their business requirements, and we are helping them understand what solutions are available using the ACORD standards,” explains Bharal. He adds ACORD also plays an advocacy role in creating an awareness of the importance of standards in the Russian insurance market. He says there are presently approximately 600 players in the Russian insurance market; he estimates consolidation could eventually reduce this number to 100.

Such efforts are important as ACORD expands its global footprint. Bharal notes that the financial services and insurance industries are already mature in Europe and North America. Companies are fighting for market share, and the rate of growth is slowing. However, the opportunity in high-growth, newly- developing countries such as Russia is enormous.

“There are challenges to overcome, but the rewards are incredible,” he says. “There is a massive pool of commercial and reinsurance business.” A growing middle class with more assets to protect and rising GDP help boost this potential.

Bharal notes another benefit is that emerging markets such as Russia lack some of the “legacy issues” that bog down more established markets such as the U.S. “There is an opportunity to leapfrog over things that get in the way in the west.” One example: Replacing legacy mainframe computer systems with compatible servers or desktops isn't much of a concern in Russia.

There is also the opportunity to cross-sell a greater range of financial services products. “You are looking at selling broader bundles in newer markets,” he says. “You might want to bundle your auto and home insurance with your checking and savings account business, for example. There is tying together of more opportunities.”

There are similar opportunities in markets such as South Africa and Australia, where ACORD also has recently become more involved working on establishing standards and more efficient IT platforms.

The ACORD Messaging Library (AML) has been instrumental in helping roll out new services to members in these markets, according to Alan Stitzer, ACORD program manager for Australia and South Africa. AML is a content data standard that links the consumer, intermediary and manufacturer. The standard was rolled out in the Australian market in 2008 for Professional Indemnity (PI) transactions. Its use has since greatly expanded.

“The ACORD Messaging Library has been a huge success story. It takes advantage of new up-to-date constructs and designs and includes new functionality, “explains Stitzer. “We are continuing to bring improvements to (industry) standards. Plus, the AML standard is more easily localized to an individual market. If you are an international company such as Zurich International or Allianz, the business-to-business communication would be the same (within the different local markets).”

Stitzer notes that ACORD became involved in South Africa when the South African Insurance Association “called us in and asked us to put messages together for them.” Brokers in the market were fearful of being cut out of the insurance business because of market changes that were to be implemented. Stitzer says ACORD worked with SAIA to build an insurance exchange that made it easier for all sides to successfully share data.

Stitzer says AML was rolled out in South Africa in January 2013 after three years of development and a year of testing. It is the same sort of business template used in markets such as Russia, India and others. Typically, a government agency or large, private insurance agency will contact ACORD officials with a request for assistance in adopting more efficient, global standards.

Stitzer adds that they key to international business success for ACORD often involves patience. “We really don't go looking for new markets,” he explains. “We get called in and are asked to evaluate the situation. People usually ask for our help. Only if it is right for the market will we go in

“International business is definitely becoming a bigger part of what we are,” Stitzer explains. “We are just not limited to America anymore.”

Special Reports /

ACORD Sets Sights on Global Markets

Related Stories

Recommended For You