Insurance industry standards body ACORD (Pearl River, N.Y.) will expand its standards framework to include business processes, owing to a contribution by IBM (Armonk, N.Y.) of elements of the vendor's Insurance Application Architecture that define common industry business process services. The contribution consists of business process models for more than 100 specific processes, standard terminology and software code drawn from the vendor's Insurance Application Architecture.
IBM's insurance process models are built around a service-oriented architecture (SOA). They assume that any insurance business process will be built around a set of services. By adopting the high-level IBM process models at the outset, insurance companies can build out an SOA that shares industry terms and meshes with other systems, both throughout the company and with business partners, easing future integration issues, according to Cindy Maike, global insurance market-segment manager for IBM's software division.
"The process of viewing a policy is the same, whether the view is for seeing whether a claim is covered or for billing a customer," says John Kellington, SVP and CTO of Ohio Casualty Group (Fairfield, Ohio; $1.4 million in net premium). Kellington, chairman of the Global Standards Committee at ACORD, implemented IBM's process models for a new policy administration system in 1997.
IBM's contribution of intellectual property - business-process knowledge and some of the underlying code to implement that knowledge - "is a first step toward developing a service-oriented architecture for the insurance industry," Kellington says. ACORD will use the contributions, including a data dictionary with more than 2,000 defined terms, as a baseline for standards that all insurance companies can follow.
While ACORD is years away from establishing a complete set of such standards, their emergence gradually could erase some of the technology advantages enjoyed primarily by the industry's largest companies. With such standards, small and medium-size companies "are more likely to participate in service-oriented architectures," opening their internal systems to independent agents as do major insurers, Kellington asserts.
IBM's Maike says adding to the number of insurance companies that adopt SOA will expand the market for IBM's WebSphere middleware, but the ACORD standards won't be IBM-specific. Any middleware vendor will be able to capitalize on the standards, she says.
This article, originally published by InformationWeek, a CMP Media property, includes reporting by Anthony O'Donnell.