Data Standard Groups Merge
London Editor
London
The insurance industrys two principal standards bodies–ACORD and WISe–announced last week that they will merge their standards-development activities on July 1 to create a globally focused, non-profit industry association that will develop and manage data standards "from consumer to retrocessionaire."
While ACORD has focused its activities on standards for personal lines, life insurance and small commercial lines, WISe has concentrated on reinsurance and larger commercial lines. As a result, the merger was a natural given the synergies involved, executives from both organizations indicated during a press conference here last week to announce the merger.
"We see this as an exciting day because its really giving the industry the opportunity to develop its e-commerce activities on a much wider basis than weve had before. In effect, its a pretty powerful force for change under the ACORD banner," said Rob White-Cooper, chairman of the London-based WISe, which was formed in 1999. He noted that the organizations had signed the deal that morning, June 20.
The expanded ACORD will be able to deal with the industrys total requirements–from consumer to retrocessionaire, including all insurance processes, all insurance-transaction types, across all geographies, across all markets for property-casualty insurance, reinsurance and life insurance, he said.
The merger creates "the opportunity to reduce any of the duplicate processes, to enhance client services, to reduce costs and frankly just leverage the synergies that exist between our two organizations," Mr. White-Cooper said.
"Integrating the standards activities of the two organizations combines our complementary skills and strengths," said ACORD Chairman John Leonard, in a printed statement. "For more than 30 years, ACORD has been providing standard forms and [electronic data interchange standards] to the insurance companies and their distributors for [property-casualty] and, more recently, the life industry."
Further, WISe and its predecessor organizations have worked "to define standards to enable reinsurance and large commercial global e-commerce," Mr. Leonard continued. "Joining forces is a logical step."
Gregory A. Maciag, president and chief executive officer of ACORD, based in Pearl River, N.Y., said the merger enhances the "network effect."
"The issue with the network effect is that the more people you add to a network, the more valuable the network becomes," he said. "Thats what were doing here; wereadding organizations to the standards network and as a result of that, increasing the values of the standards that we create."
The merger was a logical step given the trends in the industry, such as the growth of e-commerce and the ongoing consolidation and globalization of insurers and reinsurers, said Mr. White-Cooper.
The ACORD organization has been very successful in getting many of its standards "into the bloodstream of the market," he added. "I think we at WISe have also had some success in that area."
For the industry to use e-commerce in a much bigger way, Mr. White-Cooper said the development and implementation of standards is fundamental.
He said executives at both standards bodies shared a joint vision of "straight-through processing," (which means moving data from trading partner to trading partner without the need to re-enter data in each system.)
This will save time and costs while removing inconsistencies, he said, noting that straight-through processing "remains our vision."
"WISe members who are not already members of ACORD in the U.S. will become members of ACORD beginning July 1 and will be invited to continue their membership in 2002," said the joint statement from ACORD and WISe.
"Were looking forward to working very closely with our new members of ACORD who come to us from the WISe organization. Theyll be part of our board moving forward," said Mr. Maciag.
"Were eager to work with trade associations here [in London and other parts of Europe] to build events like we have in Orlando," he said, noting that the recent annual ACORD conference in Orlando was attended by 1,700 people who are involved in standards setting.
"Our mission is to set standards and that means cooperating with other standards-setting bodies," he also stated.
During the press conference, ACORD and WISe executives said the transition process would be seamless. "I dont believe the membership will notice any type of ripple when this occurs because weve got the same people," said Mr. Maciag, adding that the transition is expected to be "very, very smooth."
The merged organization will be headquartered in Pearl River, N.Y., but also will have offices in London and Brussels, which is where WISe has been centered.
The part of WISe that provides e-commerce services will continue and is currently undergoing a strategic review to build on "what weve already created," said Sean Martin, communications manager for WISe, in an interview.
These services include "Trusted Trading" (a secure framework to trade over the Internet) and the "Business Centre" (a clearing bank for messages that bridges incompatible systems), he said. "Weve proved these services work and we need to grow and improve them."
The non-standards efforts of WISe will continue to be headed by Chief Executive Officer Kevin Ashby.
Data Standard Groups
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, June 29, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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