Acord: More than Buzz Words.
The need for data transmission standards was top of mind at the Acord Technology Conference in Orlando.
Integration and strategic partnerships were the new buzz phrases buzz phrase
A phrase used as a buzzword. that dominated talk at the Acord Technology Conference in Orlando, May 20 through May 22, 2001. Front-end solutions, back-end solutions and a healthy combination of both were introduced by various vendors attending. In a rapid-fire progression of announcements at one press conference, companies were given five minutes to make their products stand out in a vast field of solutions.
At the same time, many vendors and Insurers attending the conference were focusing on standards. Acord execs made a groundbreaking announcement about their efforts to develop global standards for moving data between trading partners and also integrating existing Acord standards with a new common standard. The "eMerge" initiative will bring one XML XML
in full Extensible Markup Language.
Markup language developed to be a simplified and more structural version of SGML. It incorporates features of HTML (e.g., hypertext linking), but is designed to overcome some of HTML's limitations. standard to the field, unifying several lines of business into one cohesive approach.
"The biggest driver has been e-business expansion," says Tana Sabatino, assistant VP at Acord in Pearl River Pearl River, uninc. village (1990 pop. 15,314), Rockland co., SE N.Y., near the N.J. line. It is a residential suburb of New York City, and a computer and telecommunications research and development center.
River, central Mississippi, U. , N.Y. "Truly, we're connected, but we still can't communicate. There's a need for companies to really expand info this place. You can't do that if you have a proprietary interface." Sabatino said that companies also need to fit one standard into all lines of a company's business.
eMerge will attempt to develop a single set of standards for insurance, using a technical neutral model, representing both data and processes. "It's neutral so that what we build today does not become obsolete tomorrow," says Sabatino. "We know new technologies will evolve, and we want to build a model that will allow us to go along with those." Including more than 25 companies in what executives are calling a cooperative effort, Acord hopes to have the pilot of the new standards in place by June 2002, with a completion date of November 2002.
In addition, Acord officials announced at the conference a standards-development merger between Acord and WISe, an industry-owned organization that develops and promotes global e-commerce. The two organizations are combining their efforts at developing global standards, allowing for the creation and management of global standards for the insurance industry.
"Beginning July 1, the joint venture reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. large commercial standards that currently are managed by WISe will come under the banner of Acord," says Rick Gilman, VP at Acord. "It will expand our presence and our role in standards-setting efforts for our industry around the world."
Search far Standards
In a panel discussion, leaders from the insurance industry addressed the risk manager's dilemma in claims handling in the new economy. Elizabeth Morrell, risk management for Southern Company, Atlanta, identified how standards can help risk managers improve claims handling in the large commercial arena. Morrell serves as a chair on the RIMS technology advisory council and took part in a strategic partnership board with Acord members over a nine-month period to compile a list of industry needs.
The hope of all on the panel was that unified standards would result in more accurate and consistent claims data, a reduction in cost, more benchmarking capabilities, portability, and innovative systems solutions.
Getting the data correct the first time is crucial, experts say. With some current processes, the same data is manipulated several times, thus giving way to more error. One goal of standardization is to streamline the process into one entry that is shared across multiple platforms Refers to two or more operating environments, which typically include the CPU family and operating system. For example, if versions of a program run on Windows and the Macintosh, the software is said to support multiple platforms. , says Ray Bradbury Noun 1. Ray Bradbury - United States writer of science fiction (born 1920)
Bradbury, Ray Douglas Bradbury , a broker with Marsh Inc., New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of .
Standardization will be helpful for benchmarking across an entire company's scope of business, including litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. issues. Michael Boutot, attorney with Crawford & Co.'s litigation services, sees the possibility of benchmarking as an aid to saving the company in litigation expenses. "There has been very little research done as to the claims data relative to establishing this standard, so we do have a long way to go."
The panel hoped to achieve a reduction in labor costs. Reentering re·en·ter also re-en·ter
v. re·en·tered, re·en·ter·ing, re·en·ters
1. To enter or come in to again.
2. To record again on a list or ledger.
v.intr. the same data has a high labor cost and slows down the claims process. Reductions in IT costs could be significant, says Eileen Etzi, VP with AIG AIG addressee indicator group (US DoD)
AIG American International Group, Inc
AiG Answers in Genesis (religious group in defense of Scripture)
AIG Artificial Intelligence Group
AIG Australian Industry Group , New York, if one were to use the same code over various data functions. Data quality would improve, as would the time in completing the claims process.
Customer relationship management was also addressed at the Acord conference. "You cannot have a relationship with a population or an audience. You can only have a relationship with an individual. Therefore, identify your customer" said Don Peppers, author of several books on relationship management and technology. He spoke on the importance of customer relationship management.
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Peppers, there are distinct steps in building a customer relationship. First, identify customers across different lines of business--are they the same customer in P&C as they are in life? Also, explore the relationships within the relationship. Who's important to these customers? Pepper says the real key to identifying customers is to get your database to track only important, useful information on the customer, which starts with collecting the information.
Peppers used the example of a major bank and how it streamlined interactions to make a more cost-effective process. The bank had five different divisions with five different processes. "This created a terrible situation for customers. It was totally irrational that every silo made its own decision with respect to a single customer. If I wanted a home loan, I could apply in different divisions and get different decisions. Sometimes, customers would get an offer of a pre-approved credit card on the same day they were turned down for an auto loan." Forty-three percent of customers at the bank had one product. Yet, statistics show that customers with three or more accounts are less likely to go elsewhere, says Peppers.
The bank streamlined its processes into three distinct areas instead of five divisions with several processes each. What resulted was a more direct connection with a customer's life events.
Differentiating a customer by values and needs is another way to add one-to-one relationship building. Peppers suggests this as a way to weed out customers who are "below zero" in response to marketing efforts. He stresses putting the bulk of the attention on retaining the steady customers. Shift funds that were wasted on marketing efforts of the on-again, off-again on-a·gain, off-a·gain
Existing or continuing sporadically; intermittent or occasional: an on-again, off-again correspondence. customer to the most valued customers.
The most difficult aspect of customer relationship management, and the most critical, is to differentiate the customer by needs. "Realize that we are now in the age of interactivity," Peppers says. "Customers can interact with us in many ways now and will continue to do so."
London's insurance market has launched a well-named new initiative called Project Corkscrew corkscrew
a deformity in which the affected part is spiraled like a corkscrew.
a probably heritable defect of the lateral claw, usually of the front feet, of cattle causing serious lameness. , which stands to reduce the number of costly reinsurance transactions resulting from the brutal excess-of-loss spiral of the 1980s. Project Spiral is actually a new accounting system developed by financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. firm Grant Thornton, which estimates it can save reinsurers about $700 million annually.
Spiral transactions have made it nearly impossible for some 3,000 reinsurers that have been caught in the spiral to estimate their ultimate loss exposures and to calculate the reserve volume they need to set aside for claims. For example, the 1988 Piper Alpha The Piper Alpha was a North Sea oil production platform operated by Occidental Petroleum (Caledonia) Ltd. It accounted for around ten per cent of the oil and gas production from the North Sea at the time. oil rig disaster originally cost reinsurers some $1.4 billion, but the reinsurance spiral has inflated the 1988 amount to in excess of $15 billion, and costs keep mounting.
Project Corkscrew will depend on three data factors to calculate specific loss exposures: the first is the identity of the reinsurers that wrote cover on specific losses; second is the details of the covers written; and third is the details of resulting losses. The system can only settle market-recognized and accepted claims. The first phase of Project Corkscrew will only calculate cat losses that occurred before 1989's Exxon Valdez This article is about the tank vessel Exxon Valdez. For the spill, see Exxon Valdez oil spill.
Exxon Valdez was the original name (later Sea River Mediterranean and eventually Mediterranean disaster.
Reinsurers can submit data limited to the amount they owe or are owed on a claim, excluding broker delay costs as well as incurred but not reported Incurred but not reported (IBNR) is a term in common use in general insurance.
When a policy of general insurance is written it will typically cover a 12 month period from inception of the policy. (IBNR IBNR Incurred But Not Reported
IBNR Interesting But Not Relevant ) costs, while commercial data stays confidential. Each player will know only which reinsurers are involved in the calculation and how much the player owes or should receive. Participants disagreeing with the result of a calculation can cause the calculation to be rerun re·run
The act or an instance of rebroadcasting a recorded movie or a recorded television performance.
tr.v. re·ran , re·run, re·run·ning, re·runs
To present a rerun of. with the participation of the dissenter.
Grant Thornton officials acknowledge that the system's dependence on reinsurers' data may result in anomalies, but insist that Project Corkscrew is a valid concept. Meanwhile, Grant Thornton is trying to raise more than $2 million for it and requires a minimum of $70,000 from each participant group. Details of firms on board with Project Corkscrew weren't available at press time, but the $70,000 ante may prove to be a small price to pay for helping to resolve the spiral.
THE VIEW FROM INREON: The online reinsurance trading platform known as inreon (www.inreon.com) recently named Rob Bredahl, former EW Blanch blanch
to become pale. and Internet Capital Group executive, as its permanent CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Now he's faced with the task of piloting a competitive dot-com entity in an era of dot-com failure. But with the world's two largest reinsurers, Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. and Swiss Re Swiss Re is the world’s largest reinsurer, now that it has acquired GE Insurance Solutions (Ligi 2006). Founded in 1863, Swiss Re now operates in more than 30 countries. General Electric owns 8.9% of the firm. , as inreon's key backers, Bredahl is bullish on the future.
"One quarter to one third of reinsurance transactions could be done much more efficiently using the Internet," he told the U.K. journal Reactions. "Property facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role.
1. products, casualty facultative products, and anything that's mechanical--where there is agreement in the industry on what the underwriting criteria should be--are the most suitable for online dealing. Property-catastrophe products also lend themselves to this because there are a lot of synergies in this market."