ACORD - global insurance data standards

1
ACORD- global insurance data standards

• Xchanging Insurance Market Conference
• November 2008
• Roy Laker

2
Agenda

• The need for Standards
• About ACORD
• Implementation of ACORD Standards
• Testing and Certification
• Member Support
• London Office Blog

3
Business Concerns

• Realising shareholder value and growth
• Achieving greater process efficiency
• Improving service to customer
• Satisfying authorities
• Accessing management and risk information
• Managing legacy systems
• Addressing the changing competitive landscape

4
Clients / Risk Managers Concerns

• Insurance Policy
• Speed and accuracy of insurance quotes
• Policy issuance
• Accuracy of understanding insurance requirements
• Speed of claims payment

5
Proprietary ISLAND
CEO
6
Return on Standards Investment

• Efficiencies as great as 80
• Project savings of 20 to 30
• Reduce integration costs from 23 of new project
  budgets between 14 to 20

Ever increasing incremental cost.
E X P E N S E
CUSTOM
Ever decreasing incremental cost.
STANDARDS
NUMBER OF IMPLEMENTATIONS
Source Celent 2003
7
ACORD Standards

• What
• ACORD Insurance data, messaging and process
  standards
• Set of processing rules and information that
  provide a standard way for communicating
• Why
• Standards enable an organisation to link with
  their trading partners to a common electronic
  method
• How
• By working with ACORD staff and members to
  develop and implement ACORD standards
• When
• Implementations happening today in London, the US
  and continental Europe

8
ACORD

• Is a member run organisation
• a not-for-profit, global insurance standards
  organization
• Members define the standards
• With advice and guidance from ACORD staff
• Has nearly 500 worldwide members
• International organisation

9
ACORD Worldwide Members

• gt230 Insurance Carriers, Reinsurers, Agents and
  Brokers
• gt200 Solution Providers
• 30 Associations
• Membership Schemes

10
ACORD Standards Domains
Reinsurance and Large Commercial
Life Annuity and Health
ACORD Standards Committee
Board of Directors
Property Casualty and Surety
11
ACORD Standards geographical usage
12
ACORD Standards geographical usage
Life Annuity and Health
13
ACORD Standards geographical usage
Property Casualty and Surety
14
ACORD Standards geographical usage
Reinsurance and Large Commercial
15
RLC Goals Summary

• To achieve world wide implementation of mature
  ACORD RLC standards
• Supporting communities of trading partners to
  achieve successful implementations
• London already has such a community
• Activity is underway to bring together and extend
  European implementers into a shared community
• Similar plans are being prepared for North
  American implementers
• Ensuring effective interoperation with local
  national standards
• Implementation
• To support the Acord Standards Framework
• to enable enterprise level planning and
  management, bringing insurance into line with
  other industries which benefit from far greater
  levels of process standardisation and
  traceability.
• To support the development of the ACORD Messaging
  Library (AML)
• The RLC DSC continues to recommend the
  implementation of RLC XML for the foreseeable
  future
• It recognises the longer-term, strategic value of
  a cross-domain library of messages i.e. AML

Implementation
Implementation
Implementation
Plan for the future
16
THE CHALLENGEThe nice thing about standards
is that there are so many of them to choose from

• Andrew S. Tanenbaum

17
ACORD RLC Global Roadmap
18
RLC Implementations WorldwideLondonEuropeNor
th America
19
Market Reform Electronic Documents
20
Lloyds A global market
21
London Market - Plans
Paper with London Messages
EDI
Electronic documents with London Messages
EDI
Electronic documents with skinny RLC Messages
XML
Electronic documents with fuller/fat RLC Messages
XML
22
London Implementations

• London Market standardized on the use of ACORD
  RLC
• to support its market reform activity.
• 70,000 ACORD DRI messages per week
• handled by the Insurers Market Repository.
• ACORD RLC Placing message is operational
• between a number of key brokers and underwriters
• Adoption of the ACORD RLC Technical Account
  message is underway.
• to support premium transactions
• Xchanging (the London market centralised back
  office) is introducing an ACORD for All service
• enable all London Underwriters to receive ACORD
  RLC messages in place of London EDI message.
• All XML messages are transmitted and received
  using ACORD Messaging Services

23
Insurers Market Repository ECF Volumes

• All Brokers live
• 27 Companies live
• 4 Companies in Implementation process
• 5 Companies having demonstrations/in start up
  mode
• All Underwriting Syndicates Live
• 2007 Average no of ECF claims 4000pm
• 2008 Average no of ECF claims 14500pm

24
Insurers Market Repository EPA volumes

• Currently 150 Brokers live
• Schedule of planned enhancements to EPA
  functionality during 2008 and 2009
• 135,623 premium transactions submitted by brokers
  electronically during 2007
• 74 of volume submitted electronically 1st to 3rd
  Qtr 2008
• Planned transactions by year end 98 of volume

25
RLC in Europe

• Over 50,000 Accounting Messages p.a.
• Some Claims
• Priority is
• Accounting, settlement and claims (not Placing
  today)
• Greater volumes
• Brokers want
• More Reinsurers
• More Insurers
• Reinsurers want
• More Brokers
• Ceding Companies

26
RLC in Europe - Rueschlikon

• Agreement signed in Vienna on 17th September 2008
• ACORD RLC premium, claims and DRI
• Running messages over the SWIFT network
• Partnership between
• SWIFT, ACORD, Swiss Re, Munich Re, SCOR, Aon,
  Benfield and Willis
• A shared industry solution for electronic data
  transmission

27
Other key Points

• Full pricing proposal for pilot in November
• Validation to be included after June 2009
• Future phases include
• Life Reinsurance
• Pairing
• Other ACORD standards
• Settlement netting
• Risk exposure data

28
North America

• USA
• XML is the Standard in the US
• Moving away from EDI but still being supported
• E-Reinsure over 500,000 Placing messages to date
• Need to increase the number of Reinsurance
  implementers and add Ceding companies as message
  senders
• Bermuda
• Placing starting to happen from London
• Accounting implementations
• Canada
• Examining the use of claim movement message for
  advices and implementing accounting messages

29
Conclusion

• ACORD RLC XML standard is mature
• ACORD RLC standards are a proven solution
• driving benefits today
• Vendor partners have matured
• significantly reduced the barriers to entry
• reduced the ongoing operational costs
• Focus is on implementation with more trading
  partners

30
STP

• Lower Cost
• Automated Workflow
• Integrated Systems
• Reduce Errors
• Less Translation
• Better Service
• More Consistency
• Higher Quality
• More Transparency
• Speed to Market
• Ease of Doing Business

31
Exposure Data
32
Exposures and binders

• ACORD working group re-validating 2003 Property
  standard
• Will also promote usage
• Verification of Exposure data this year
• Some pilots of binders this year
• Lloyds franchise also considering ACORD standard
  as part of regulation

33
Industry Value Chain
34
Testing and Certification Facility
35
Test first with ACORD Testing and Certification
Facility (TCF)
YOU
BUSINESS PARTNER

• Connectivity
• Security
• Standards compliance

And get trouble-free implementation with partners
YOU
BUSINESS PARTNER
36
Testing Certification

• Over 7,000 messages sent/received
• All London initiatives supported
• ECF / AS repository
• ELPAN2 / EBOT
• Electronic Placing (direct and via hubs)
• DRI Large Files (20mb) now supported
• 1.2Gb files transferred in testing
• Increasing demand from clients implementors
  encouraged to support ASAP.
• Digital Signature testing supported
• Why struggle with counter-parties?
• TCF provides a neutral, authoritative overview
  which proves your systems capabilities
• Proven to reduce mean time between bug fixes
• Avoids you performing diagnostic work /
  consultancy for your competitors

37
(No Transcript)
38
Member Support
39
ACORD Update

• London Office Blog www.acordlondon.org

40
World Headquarters Two Blue Hill Plaza 3rd
Floor Pearl River, NY 10965 USA
1 845 620 1700

SLIDE 40