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Emerging Standards Drive New Strategies From Technology Officers

The growing importance of standards and the ability to interface in the insurance industry is forcing space for new management and decision-making strategies.

One of the biggest demands on insurers and insurance technology providers is finding ways to interoperate. As vendors look for companies with which to partner and insurers and agencies size up one another's ability to interface, the capability to leverage standards like ACORD and XML is a commodity that constantly is gaining value. So while the quality of data remains the driver of business, finding ways to interoperate is the vehicle.

At a panel discussion of the ACORD LOMA Insurance Systems Forum in Orlando, Fla. on Tuesday, industry experts addressed the importance of interoperability in insurance systems and processes when considering emerging technologies in the insurance space. "Standards really allow companies to reduce TOC (total cost of ownership) around integration and lend the ability to look across silos within the business," commented Cynthia Maike, global market segment manager, IBM Software Group for Insurance (Armonk, N.Y.). This allowance not only makes it easier for companies to integrate and share data, but it is also an important factor in the planning process, according to Jim Rogers, director, agency technology strategy for The Hartford's property-casualty operations (Hartford; $666 million in net income for the first quarter of 2005). "We are starting to share our philosophies and thoughts about leveraging standards with our distribution partners way ahead of making technology decisions so that as we plan for the future, our partners will know what to look for," said Rogers.

One way to manage the planning process is to assemble working groups within partnerships that are dedicated to ensuring the smooth sharing of information and processes. "From a provider perspective, everyone talks about SOA (service-oriented architecture) and embracing standards, but we need to have more of a working groups requirement," said Maike. "As we look at where standards are going, working groups will aid us in reaching true interoperability," she continued.

As insurers and technology providers go through the steps of securing ways to interface, it is important to have a strategy for ensuring a constant and smooth flow of data and processes to end users. "We strive to remain more focused on the message we are giving to our clients then on the bits and bites of our business; so we need to get our developers to embrace standards," said Rogers, who explained that The Hartford decides on and implements standards from the top down to ensure complete adoption.

"We haven't gotten too much push-back in regard to the difficulty of standards adoption from a programming perspective, but the syntax is what seems to pose the most difficulty," said Rogers. IBM has established the position of a chief standards officer for different areas of the business to achieve this ease of adoption, according to Maike.

The order in which standards are implement -- externally versus internally -- also may have an impact on ease of adoption, according to Mark Gorman, strategic adviser, TowerGroup (Needham, Mass.).

The adoption of standards externally prior to internally, or interoperability versus intraoperability, is much more prevalent, explained Gorman. "Organizations are more interested in facilitating interaction with the external world and intraoperability is more focused on the utilization of workflow engines within the organization," said Gorman. "But the further out standards in technology go, it places more pressure on back-end systems, which helps drive adoption internally."

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