By: Rick Gilman, Vice President, Communications, ACORD
That 20-year-old (?) advertising tagline for the New York State Lotto has long engrained in the public's mind the obvious truth that if you don't buy a lottery ticket, no matter what number is drawn, you'll never win. A very similar message could be used in the insurance industry regarding standards development. You've got to participate if you're going to benefit from it.
Standards development is a highly collaborative process and one where the "first movers" can reap a lot of benefits far ahead of the rest of the industry. For more than 33 years, ACORD has been facilitating the development of standards for the insurance industry. I say "facilitate" because for all of the resources within our staff of professionals (now numbering 60 worldwide), at the heart of our ability to develop, maintain and drive implementation of industry standards is the volunteer. Hundreds of volunteers participate in the dozens of working groups, subcommittees, and steering committees that make up the engine of ACORD.
Lead or Follow
As many of our participants admit, they are involved because to "not be at the table" means someone else will be driving the development of standards that they'll have touse sometime down the road. Charlie Dietz, director, enterprise architecture and enterprise technology, MetLife, put it best when he said, "If Met is not participating in the development, then what comes out is someone else's standard. I can't afford to let that happen." The bottom line: Either you lead or you use what the leaders determine.
The Celent Communications' report on ACORD XML Standards identified the significant savings individual companies and the industry as a whole could achieve by implementing standards. Upwards of 20 to 25 percent savings could be gained on systems integration for new projects, with the potential of up to 80 percent by the third or fourth project. The industry in the US alone potentially could save $250 million annually by implementing standards. This is just for new projects. Imagine the potential for existing systems integration and the potential of streamlining those. These are significant numbers and it's those companies that come on board first that will gain the advantage soonest.
But collaboration doesn't stop with carriers, reinsurers, intermediaries, and solution providers getting together to develop the standards. Much of what ACORD does is to seek out other standards organizations around the world and look for opportunities to work together. By harmonizing ACORD standards with many other effective standards organizations serving local jurisdictions around the world, we're all able to bring greater value to the investments our respective members have made in industry standards.
The harmonization project with eEG7 and CSIO is a classic example of the collaboration on behalf of the world insurance community. eEG7 is a consortium of the trade associations and standards bodies of five European countriesFrance, Germany, Denmark, Belgium, and the Netherlands. Together with CSIO of Canada, ACORD is working on a harmonized data dictionary that will bring together the underlying data definitions of all of these geographies. It will facilitate implementation of standards across business processes within these geographies. In a country where ACORD addresses only the reinsurance aspect of the business, while national standards address the front end, there will be a mapping between those points, opening up the possibilities for straight-through processing.
Collaboration has been a guiding principle for ACORD for many years. In fact, our tagline has been "ACORD: Bringing the Industry Together." That philosophy is carrying through into our annual conference. As part of this year's conference in Orlando, for the first time, ACORD has brought together two conference partnersDTCC (Depository Trust and Clearing Corp.) and CIECA (Collision Industry Electronic Commerce Association). By uniting different groups with similar interests and needs, ACORD is providing a stronger venue for communicating our message about standards.
Next year we're taking this even further. The 2004 conference will be the first of its kind, as our annual conference converges with the LOMA Systems Forum to bring the industry the largest systems-focused event ever. The ACORD LOMA Insurance Systems Forum will bring together nearly 3,000 people, 200 exhibitors and a program of workshops and general sessions that concentrate more education, exposure to business case studies and technology expertise than you'll find anywhere else. Mark your calendars for the ISF 2004, May 22-25, at the Paris Hotel, Las Vegas.
So, while playing the lottery is a gamble, participating in standards development isn't. It's all about leadership and being a "first mover" where it counts. For more, log on to www.acord.org.