“Everyone through the lifecycle of an insurance transaction values from getting data in a consistent fashion rather than the wild, wild west of different formats (…) ultimately needing transformations all the way through.”, said Mark Bennett, Senior Vice President of Global Business Development at ACORD and ACORD Solutions Group.

In his speech during Future Processing’s InsurTalk event, centered on the theme of “Operationalising Standards and the Changing Patterns of Data Exchange”, Mark shed light on the importance and implementation of data standards in the insurance industry.

It is surprising to note that over 50 years ago, data standards in the insurance industry were composed of printed documents, including 800 forms for certificates of insurance and proposal forms, which have now evolved into modern JSON digital standards, facilitating modern data exchange.

Key takeaways

• Standards are crucial for consistent data handling across the entire insurance transaction lifecycle, reducing the need for constant transformations.
• Adopting standardised data practices leads to substantial improvements in efficiency, data quality and operational processes.
• Embracing standards is essential for leveraging new technologies like AI, which transform data exchange processes across the insurance industry.
• Future Processing’s Data Harmonisation Framework is designed to facilitate data standardisation in accordance with the latest data governance principles. This robust solution enables Specialty Insurance to take advantage of all the benefits discussed during the InsurTalk event while minimising transformational risks.

The crucial role of data standards in driving efficiency and innovation in the insurance sector

In the insurance industry, data standards are invaluable to every participant along the value chain, from the originating producer to the final stages of reinsurance, permeating through various organisational functions such as marketing, underwriting, policy administration, claims, customer management, and enterprise management.

Without standards, there is a wide variation in operations and numerous transformations required, which can lead to inefficiencies and inconsistencies.

Mark pointed out: “We’re all seeing an exponential growth in data, and for underwriters (…), the challenge is making the most out of this data and bringing it together.”

Standards help streamline this process, reducing the need for extensive data augmentation. Moreover, as the industry evolves with advancements like generative AI, the way data is exchanged continues to transform.

Mark pointed out that ACORD’s role in managing data standards across the insurance value chain becomes increasingly pivotal, ensuring that the industry can adapt to and leverage these new technologies effectively.

He highlighted several key advantages, like:

• up to 50% improvement in turnaround time by adopting digital messaging standards for organisations,
• a nearly 70% improvement in cash flow by accurately allocating incoming funds,
• over 80% increase of data quality by eliminating manual data entry,
• query times reduced by more than 70%.

These tangible benefits were demonstrated by the examples of companies such as SCOR, Swiss Re, Aon, and WTW, showcasing the practical advantages of adopting data standards.

This further proves how crucial implementation of data standards and data harmonisation are and highlights the importance of finding a strategic tech partner to achieve that goal. At Future Processing, we serve as your trusted technology and consultancy partner, and digital transformation of the insurance sector is our shared objective.

Overcoming challenges in adopting data standards

Mark addressed some common challenges faced by organisations in adopting data standards, particularly system integration and budget constraints. He explained how ACORD and its partners are tackling these issues through initiatives like ADEPT, “a messaging gateway […], a portal and an API enabling sender and receiver patterns on the ACORD standards,” and Ruschlikon hubs, which have been implemented in regions including Italy, Spain, Bermuda, the Middle East, and Singapore.

“These initiatives help organisations start with ACORD messaging, supported by system vendors already pre-configured for these standards,” he added.

The Rushlikon initiative was also mentioned by Cassandra Vukorep, the Chief Data Officer for Lloyd’s of London and a keynote speaker at the event. She mentioned that the initiative has successfully implemented the EBOT and ECOT ACORD Standard specifications “with AXA, (…) Swiss Re, and they know how to actually get these benefits – those proof points are there. This is a standard. This isn’t about technology, but about the language that you use within your company. It’s through the mapping. If you know what your natural language is, you can map it to an ACORD standard.”

Looking into the future

With upcoming advancements in mind, Mark explored the integration of emerging technologies such as AI with data standards. He highlighted the importance of preparing the industry for these technological changes and the potential benefits of leveraging AI for more efficient data exchange processes.

Practical steps to start your data standardisation efforts

For organisations looking to start their journey towards data standardisation, Mark offered actionable advice. He recommended “mapping out current trading partners, assessing their readiness for ACORD standards, and prioritising implementation efforts.” He also stressed the importance of learning from peers who have already adopted these standards to avoid common pitfalls.

Mark encouraged organisations to engage with their software vendors, many of whom have already integrated ACORD standards into their systems. As an ACORD member, Future Processing helps clients succeed in their digital transformation efforts. Our Data Harmonisation Framework optimises organisations’ data structures, aligning them with business and external requirements to deliver tangible business value.

Conclusion

All things considered, adopting data standards is not just a technological upgrade but a strategic move that can transform the insurance industry, ensuring consistency, accuracy, and efficiency across the entire value chain.

Are you interested in learning more about data standards for your company? Future Processing’s Data Harmonisation Framework is a robust solution designed to facilitate data standardisation in accordance with your stringent data governance policies. Feel free to contact us to discuss the possibilities for your unique business.