New York, NY, USA
October 9,
2002
ACORD XML Standards in US Insurance
Report Published by Celent
Use of ACORD XML could save industry over US$250
million annually.
Celent’s new report, ACORD XML Standards in
US Insurance, finds that the US insurance industry is increasingly
embracing ACORD XML.
"Carriers surveyed by Celent either expected to
achieve or had already achieved integration efficiencies on the order of
20%-30% by using ACORD XML standards,"
says Matthew
Josefowicz,
a senior analyst at Celent and author of the report. "If embraced
universally throughout the US insurance industry, the use of standards
could save the industry over US$250 million in technology costs
annually."
 72% of the top 50 US P/C carriers and 46% of the top
50 US L/H carriers are ACORD members, as are 52% of the top global
reinsurance carriers. ACORD currently maintains three separate XML
standards: one each for Life, P&C/ Surety, and Reinsurance. Each
standard consists of a data definition or model, a tabular data
structure, and a transaction wrapper.
Celent found that carriers are embracing standards
for five main reasons: to speed integration with external business
partners; to speed integration with external technology vendors; to enable
internal integration; to save time and effort from developing internal
standards; and to avoid internal political conflict.
Actual usage of standards in production-level
technology projects, however, is still at a relatively early stage. Celent’s
survey determined that the main reasons carriers delay adopting standards
are: that their business partners are not yet using standards; that using
standards adds unnecessary complexity; that they have already developed
internal schemas; that standards are not comprehensive; and that standards
are immature. Even considering these issues, Celent believes that given
the potential savings to be had, carriers should aggressively face their
fear of being first movers in order to start saving as soon as possible.
Celent predicts that the majority of new insurance IT projects that
involve XML will be based on ACORD XML standards within three or four
years.
The report includes two case studies that illustrate
some of the advantages gained and challenges faced by carriers
implementing ACORD standards in technology projects. The first case study
examines the experience of a carrier that is using the standards in
internal systems development. The second looks at using the standards to
integrate with business partners.
A Table
of Contents is available online.
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