ACORD releases next generation digital standards

It's one more step in the industry’s work to streamline data exchange

ACORD releases next generation digital standards


By Alicja Grzadkowska

During a variety of insurance transactions, specific pieces of data need to be collected, validated, transmitted, and reflected within carriers’ policy administration systems. In the past, these transactions involved the completion and sending of paper forms, but as technology has evolved so have standards that define data exchange within the insurance industry.

In April, the global standards setting body for the industry known as ACORD released Version 1.0 of its next generation digital standards, which enable omnichannel information exchange using fine-grained business transactions.

“These digital standards are a logical extension of what we’ve been doing historically, but they’re at a much more granular level,” said ACORD CEO Bill Pieroni (pictured). “Instead of a transaction including a lengthy set of demographic data, claimant data or insured data, it now does it in much more granular ways.”

ACORD’s digital standards function across any technology interfaces to support data transfer mechanisms, including microservices and RESTful APIs. Applications of these messages range from customer-facing mobile apps to the Internet of Things and distributed ledger technology.

The Canadian insurance marketplace is no stranger to streamlining data exchange, which these standards help to do. In September 2019, the Insurance Brokers Association of Canada (IBAC) announced that its Data Exchange Working Group completed its first Reusable Data Service (RDS), which marked a significant step in IBAC’s work to progress the level of connectivity between brokers and insurers by allowing for the sharing of information between disparate systems.

Similar work to streamline processes is going on across the Canadian insurance industry and requires the participation of all stakeholders in the insurance transaction, including brokers. For instance, the Centre for Study of Insurance Operations (CSIO) recently hosted the first sessions for the INNOTECH Claims and Billing Working Groups, which were comprised of subject matter experts across different segments who focused on identifying improvement scenarios in claims and billing processes. The working groups aimed to develop an electronic notification solution for claims and billing, which in turn allows brokers to make more productive use of technology and automate manual work.

ACORD has been on its own mission to standardize data exchange, starting in the 1970s with property and casualty administration forms, moving into Electronic Data Interchange (EDI) AL3 standards in 1981, and then transitioning into XML standards and eForms in the 1990s and 2000s.

However, there have been challenges along the way in the industry’s work to streamline data exchange, which ACORD is familiar with.

“Standards have huge network effects associated with them, so the more people that use them, the more valuable they are. However, people and firms and industries are naturally parochial,” said Pieroni, pointing to the Canadian insurance marketplace, where the landscape looks much different between provinces as well as between insurance carriers. “The challenge ultimately is how do you balance the tailoring that’s needed for unique markets with the need for interoperability, and scale and scope of economies? It’s really important that when these groups focus, they focus on the unique and special parts that truly do need to be unique and special.”

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