Standards Drive Change

Human progress throughout history has been fostered by standardization, but the insurance industry has lived without standards for a long time, observed Michael Boyle, CIO and vice president of Allstate Financial (a subsidiary of Allstate; Northbrook, Ill.; $32.1 billion in revenue), in his keynote address at the September Insurance Standards Leadership Forum in New York, produced by Insurance & Technology and ACORD.

Citing the example that the standard width of Roman chariots dictated the width of the Roman Empire's roads, Boyle related that standards provide familiarity and foster efficiency. Using the impact of Depository Trust Company standards on the capabilities of Wall Street to drive the point home, Boyle noted that "Trades that cost $600 to process 15 years ago now cost $9.99 over the Web." Such lessons are driving an effort at Allstate Financial to revamp back-office operations by going 90 percent paperless through reliance on standards-based technology, Boyle said.

In the session "Beyond ROI: Winning the Resource Challenge," Gary Knoble, vice president, data management, The Hartford Financial Services Group ($18.7 billion in assets), discouraged the use of "quick and dirty" short-term implementations that fail to use standards. "It's important to develop a process for consistent implementation of standards across the company and find out how to move them throughout," he commented.

Standards by Any Other Name

Christopher Chartrand, senior vice president, policyholder services, Genworth Financial (Richmond, Va.; $100 billion in assets), advised that technology executives lacking senior management support avoid implementing standards initiatives per se, but rather look to begin standards work through a business-focused project. At Genworth, such a project was one designed to streamline business reporting. "In putting in that technology, I also took the opportunity to say, 'Where can I use standards? Where can I put them in?' But I didn't call it a standards project," Chartrand explained.

Matt Josefowicz, the New York-based manager, insurance group, Celent Communications, said during the session "The Compliance Conundrum," that "For a long time, compliance has been a necessary evil of insurance operations - it's what you do to stay out of jail. But what we're seeing now is the intersection of compliance and business value, which is an interesting development that the industry is poised to take advantage of, and one where standards play a key role."

Speed and accessibility are priorities at reinsurance broker Guy Carpenter & Co., and the New York-based firm's CIO, Paul Fox, discussed how standards implementations are key to getting there during the session "Achieving Interoperability." The goal of the current initiative, which involves consolidation of six back-office systems into a single global system, is to "reduce the number of places to go to find information" as well as "faster delivery of new products," he noted.

At New York-based AIG's ISG DBG Reinsurance unit, standards are key to realizing a vision of "creating an automated seamless system" that would enable underwriters to spend their time negotiating deals rather than navigating unwieldy technology, according to business systems officer John M. Cunningham. "We want to insure we integrate standards into everything we build," he said of the project that was launched three years ago. AIG's goals include the ability to provide "easy management of data and reinsurance information; improve the control of underwriting, claims and accounting information; reducing the number of systems ... and [facilitating] real-time transactions on the Internet."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio