ACORD XML Standards Drive Development

Q: What has your company done in the area of XMLimplementation, and why?

A: Hugh Anderson, director, agency/broker e-business, The Hartford Financial Services Group, Inc. (Hartford): XML is the technology cornerstone of our e-business strategy. Using ACORD XML data and transaction standards as the foundation, we have built the capability to process new business transactions in real time for the personal auto, homeowners, business auto, BOP, and workers' comp lines of business. We believe real-time transaction processing with our business partners, based on ACORD standard XML, is enabling us to maintain our leadership position in the area of once-and-done processing.

A: Steve Varga, assistant vice president, Web development, Safety Insurance Co. (Boston): Safety has created a Web-based claim inquiry application using the ACORD XML Message Specification for Claims (compatible with XML Business Specification CRV2) Draft 1.0. This application will show insureds relevant claim status information during their claim. This XML-based application is part of InsureAnswer.com, which was created to provide carrier information to the insurance customer through the independent agent's Web site. Using the ACORD XML standards allows Safety to leverage XML-based technology to create applications where an open exchange of data can occur. With this data, insureds will be able to have access to all of their policy, claim and billing data from the agent's Web site, creating a full-service insurance application.

A: David Findley, senior vice president, operations, personal and commercial lines, Travelers Insurance (Hartford): Travelers is the first company to implement a real-time SEMCI application for our agents to quote small commercial policies using the ACORD XML standard. The goal has been to maximize the efficiency of our agency/carrier partnerships and provide additional choice for agents. With a SEMCI option, agents will be freed from redundant keying-in of information, and training and processing costs will be reduced. We've been in production since the end of 2000. Our primary partner has been Applied Systems. We are also working with AMS/TowerStreet. The bottom line is, the platform can interact with anyone that has XML capability.

A: Randy Eick, CX(ml)O, commercial insurance, Royal & SunAlliance USA, (Charlotte, NC): Royal & SunAlliance's commercial insurance division is always looking for ways to eliminate expenses and improve the efficiency of the underwriting processes. The commercial division does a great deal of middle-market and large-account business and, like a lot of P&C carriers, we did not have much success implementing AL3 standard for commercial lines.

A: Guy Mills, assistant vice president, information systems, Manulife Financial Corp. (Toronto): Our first ACORD XML implementation was June 2000 for downloading in-force policy information to our Canadian distributors. By the end of this year, we will have used ACORD XML transactions in Japan for new business processing, in the US for connecting back-end systems to our individual life agent Web site, and in about five other projects. To date we have partnered with DWL, Solcorp, Navisys and Acordial in projects utilizing ACORD XML.

Q: What are the results so far of the XML initiatives? Have the goals been met?

A: Anderson: We have successfully implemented real-time XML transaction processing directly with agency partners and with MGAs using Internet front ends. We are also working with Internet-based insurance malls in order to drive business into our agencies from new sources. Through these sources, quotes are returned and policies issued every day. Growth potential is unlimited.

A: Varga: The claims application has been created using Safety Insurance specifications and ACORD XML standards. This has been our first successful step in creating a full-featured claim inquiry application. Based on the progression of the ACORD XML specifications, Safety has refined the application development cycle using these standards.

A: Findley: We have a number of agents in production with SEMCI. We have shown that, for agents who choose SEMCI as their approach to agency interface, the basic process is effective. The SEMCI solution will be maximized once other carriers come to market with production applications.

A: Eick: We deployed a pilot application in January that accepts electronic submissions sent through the Internet using the ACORD XML standard. Currently it only handles E&O liability submissions for our technology practice, but as a proof of concept it demonstrates the potential for cost-savings. We can receive a submission from a broker and deliver a completed rating worksheet to the underwriter without it ever being touched by one of our people.

A: Mills: It is a little early to quantify the benefits Manulife Financial has realized through adaptation of ACORD XML standards and, to be honest, we are not measuring these benefits closely. Our strategy is based on the simple belief that using existing standards will almost always cost less than inventing something from scratch. On a qualitative basis, we have seen benefits in integrating packages from multiple vendors and a reduction in up-front design activities. Another benefit is we tend not to pay vendors as much for developing proprietary interfaces between packages and our back-end systems since, through the use of ACORD XML, there is less customization required. Where several vendors are involved in a project, the use of ACORD standards tends to reduce the management effort required to get them to work together.

Q: How have the ACORD XML standards helped your company develop internal standards?

A: Anderson: ACORD XML standards are essential to the success of our e-business strategy. As the Internet becomes ubiquitous in insurance, the requirement to use one XML standard as a design framework extends beyond agents and companies to all players in the insurance transaction. It is essential that all players buy into the same XML standards to minimize cost, maximize efficiencies, and enhance speed to market.

A: Varga: Since Safety Insurance sells exclusively through independent agents, any method of integrating applications to facilitate efficient processing among agents, service partners and carriers is vital. This data exchange saves agencies time and money through entering information in a once-and-done environment and puts information at agency CSRs' fingertips to answer questions immediately.

A: Findley: Externally, we've used ACORD standards exclusively for all agency/carrier interfaces. Internally, we've used ACORD standards wherever they would benefit the efficiency of our agency interface support processes.

A: Eick: The minute someone hears that you're using XML, they get excited. We encourage everyone we speak with to look for opportunities to use XML in their applications. We also encourage them to take a look at the ACORD XML standard. We want the ACORD standard to become the de facto standard for exchanging information within the organization, as well as with external entities.

A: Mills: The ACORD life model, on which ACORD XML standards are based, is an incredibly rich resource for any type of development project involving client, distributor or product information. Since ACORD standards apply globally and are not tied to a particular vendor, it is a much easier management effort to get internal software developers and vendor partners to use these standards than it might be using an internal standard. At Manulife Financial we have a rule of thumb when designing interfaces between systems or building data warehouses: Look to ACORD standards first and supplement that with proprietary standards when necessary.

Q: What's next? Will your company expand the XML initiative to other applications/business areas?

A: Anderson: The Hartford will continue to expand its e-business product strategy based on the ACORD standards. We intend to work with all our agents, brokers and business partners to use e-business to create competitive advantages.

A: Varga: Safety will continue to partner with entities using the ACORD standards, such as agencies, vendors and carriers, to provide applications that empower insurance customers through their independent agent. Safety will enhance InsureAnswer.com to facilitate the claims process, simplify maintenance, interface with glass shops and to coordinate the billing process all in the name of their independent insurance agents. Safety will continue to use the existing draft specification, where completed drafts are available, and incorporate existing AL3 structures and IFX standards in application development where the ACORD XML standards are not complete. Safety hopes to aid the progress of standardization through early adoption for new applications and regularly updating existing applications once standards are finalized.

A: Findley: Travelers will roll out commercial auto in state segments throughout 2001. We are also pursuing real-time interface via XML in personal lines, where we already have a robust batch SEMCI solution to issue new business and are imminently deploying batch SEMCI policy change capabilities.

A: Mills: The initial focus of applying ACORD XML and OLifE standards at Manulife Financial has been for individual life products, but our strategy is to expand into our wealth management and group life and health businesses. A driver behind this is the need to aggregate siloed product information into customer-centric views. A change of address is basically the same if you are dealing with a variable annuity, a universal life product or a 401(k) plan. ACORD XML is the only standard that can be applied to each of these lines of business.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio