P-C ACORD-XML Standards Advance If I couldcharacterize the past year, it would be the time when “the rubbermet the road.” ACORD XML Standards and real-time deliverycapabilities truly came off the paper of theory and into the realmof reality, impacting agents and their carriers in a big way.

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In just the last year alone, 44 new XML messages for propertyand casualty business have been developed, in addition to thebuild-out of several other messages, bringing the total numberavailable to 644.

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As a result of all of this activity, some interesting trendshave also emerged. Were seeing carriers and solution providersgaining greater appreciation for the impact XML standards can haveinternally, helping to connect the many different systems together.It has already been established that systems integration can oftenbe the difference between a successful partnership and one thatfails. The “go” or “no go” decision in a merger or acquisition dealsometimes hinges on whether the new, larger entity will be able tooperate smoothly or suffer from prolonged and “resource-draining”incompatible systems.

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Fortunately, one trend we see is the recognition by carriersthat building those linkages to connect disparate internal systemsbased on industry XML standards is a way to truly achieve apositive return on investment in information technology. A newsystem that leverages standards to integrate existing systems, onceyouve completed the first project, only grows in value. The moredisparate systems that link through standards, the greater thevalue, and since its reusable, the cost savings increase. Sinceintegration is inevitable, some companies have realized that theresno time like the present to begin implementing standards.

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More and more of the case studies ACORD publishes have to dowith new systems integration projects. Those “first movers” areshowing the rest of the industry that “getting from here to there”,from the costly mindset of point-to-point solutions to the openstandards-based “any-to-any” flexibility, can only be achieved witha long-term vision. And like any journey, it begins with a firststep.

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Another trend we see is in the projects many are choosing totackle. The frustration many companies felt early on in the rolloutof industry XML standards is fading. Because of the nature of thesestandards, implementation can begin slowly and on a small scale.Everything doesnt have to be done at once.

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And where did companies find the biggest return on investment?They found it in the wishes of agents. One of the key findingscoming out of the AUGIE Agency Survey last year was the need forreal-time transactions. In fact, the billing inquiry standard wassubmitted for development in June 2002 and just approved lastNovember, as a result.

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For many companies, finding an implementation project that willresult in a wide adoption by agents is essential now, since manycompanies invested millions of dollars in upload projects that fewagents used. So billing, claims, policy, etc. inquiries have becomethe current area of development. Fortunately, standardizing theinquiry business messages and utilizing XML to do it real-time hasa significant impact on the bottom line for agents and improvescustomer service, too.

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Inquiries tend to be very labor intensive and time consuming.Hundreds of thousands of claims and quotes are processed on a dailybasis, so it stands to reason that moving towards a quicker andmore efficient electronic transaction process is extremelybeneficial in meeting or exceeding customer expectations. Much inthe same way the banking industry took a costly and time consumingtransaction through the teller and dropped the cost down to penniesand the time to seconds through the widespread installation of ATMsand their related standards, insurers are taking the cost out ofinquiries.

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When, through standards, carriers are able to take what normallyis a minimum transaction of about 5 minutes (often more when a CSRis unable to connect with the right company person) down to 5seconds by having the information gathered automatically, everyonewins. Companies win because they dont have to have a live personrespond to the inquiry. Agents win because they spend less time ona highly repetitive daily task. And consumers win because they getthe information they want, when they want it, without having towait. All of this contributes toward enhancing the overallcustomer/client experience.

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So the movement by companies toward real-time, standards-basedtransactions is possibly a sign that all of the partners in theinsurance value chain recognize that collaboration can lead tosynergies. Those companies that offer their agents standards-basedsolutions are presenting themselves as “easy to do business with,”a key element in the placing of business.

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Collaboration in standards development is also a growing trendin and of itself. Whether its the more than 400 volunteers thatmake up the working groups, subcommittees and steering committeesthat drive ACORD industry standards growth and implementation, orthe dozens of other standards organizations around the world withwhom ACORD participates, collaboration within the insuranceindustry is very strong.

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ACORD recognizes that there are many standards throughout theworld that have been very successful in addressing the local needsof their respective domestic markets. And where these standardsexist, ACORD takes steps to ensure its standards are compatible andharmonized with them.

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So, as the development and growth of industry standardscontinue, the ways in which companies will implement and utilizethem will evolve.

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Ronald Dudley is vice president of standards for ACORD basedin Pearl River, N.Y.

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ACORD developed 44 new XML messages for property-casualty in thelast year, bringing the total to 644 in all With agents
wishes in mind, current development areas are billing, claims andpolicy inquiries.


Reproduced from National Underwriter Edition, May 19, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved. Copyright in this article as anindependent work may be held by the author.


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