Report says XML to improve distribution channel service. (Technology: Technology Notes).

Extensible markup language strategies are being touted as ways carriers can lower information technology Costs and improve distribution channel service levels.

According to a report by research and advisory firm Celent Communication, carriers could deliver even better service at lower costs by accelerating the implementation of new tool that rely on the emerging Association for Cooperative Operations Research and Development XML standards.

The report, entitled 'Technology and the Evolution of Insurance Distribution," summarizes distribution trends and discusses the perspectives of the carriers and distribution channels on the new technology. Celent points to three phases surrounding the evolution of distribution technology--Web migration, data standards (XML) and distributed transactions. While most carriers are now in the first phase, or are making the transition into the data standards' phase, Celent believes that over the next two to three years, carriers will gradually migrate their technology toward distributed transactions. This approach will help carriers build necessary skills while setting the stage for delivering improved service at lower costs, according to the report.

"As more carriers increase support for ACORD's XML standards and focus future developments on being ACORD XML-compliant, greater activity will be generated throughout the industry, not just by larger carriers but also by smaller insurers and vendors," said Craig Weber, a Celent analyst and author of the study.