The mere mention of insurance seems to have an effect on people. Bring up property or liability or health insurance and they'll probably talk about how much they pay or what claims experience they've had. Discuss life insurance and they'll change the subject or run away. Bring up reinsurance and responses might range from "huh?" to an impolite yawn.

Despite the perceptions, or misperceptions, the insurance industry is a dynamic and far-reaching business. And for good reasons, insurance companies and related software vendors usually embrace the latest technology. The insurance industry is data-centric and thrives on new technologies and communication methodologies. That's why Web services combined with insurance data standards will bring new efficiencies and better experiences for parties up and down the global insurance value chain – from risk management and underwriting to service and reinsurance.

A major challenge faced by all branches of the insurance industry is governmental regulation and the corresponding reporting of data. Insurance is highly regulated throughout the world and on various bureaucratic levels from local to national to international. Reporting to those regulators is less burdensome when utilizing data standards and creating a common ground. Moreover, when you consider that different lines of business — workers' compensation or auto or liability for instance – require different customer data sets and thus forms, it's easy to understand why data standards are so critical for expedient communication and reporting to the appropriate governmental bodies.

Based in Pearl River, NY, the Association for Cooperative Operations Research and Development (ACORD) was founded in 1970 as a not-for-profit, industry-owned entity to develop and provide standard forms for insurers and agents. Once focused on EDI standards for the U.S. domestic insurance industry, ACORD now has a global reach – as the needs of members have grown. Standards are critical in helping to move information from the point of sale across borders and back again when claims are settled. Along the way multiple parties are touching all or part of that data. In recent years ACORD developed XML standards in insurance, serving software and hardware vendors, agents, brokers, insurers, and reinsurers. (Reinsurers sell insurance to insurance companies to help protect them against excessive losses.)

Today, insurance software vendors must program changes, update new forms, code everything, test it, get it implemented, and make sure agents and brokers are installing the newest version of software – and by the time that happens there might be a dozen new forms and dozens of changes in the old ones. With a Web services interface, updates are instantaneous. It will be much easier for insurance firms to comply with government regulations, and all parties can be assured they'll be using the most up-to-date ACORD forms, reducing errors. Furthermore, agent and broker technology system vendors won't need to focus on writing code or testing it. Instead, they can rely on what ACORD provides to be functional and timely, which helps them comply with various governmental regulations. And they'll be able to free up programmers to develop other product enhancements.

Standard E-Forms Being Developed
ACORD has developed more than 500 different forms that professionals in the insurance industry use daily. The bulk of these forms are used by tens of thousands of independent insurance agents and brokers – local business people who deal with clients every day – to handle insurance applications and provide services after sale. ACORD also establishes and promotes standards used to communicate that information through the data flow of member companies. Software providers incorporate these standards into their products and clients use them in this context. When agents enter data on forms through their agency management system, the data is captured in text form and transmitted to the carrier electronically. The insurer then transfers that data to its own policy administration system, thereby eliminating re-keying.

The insurance industry is data-centric. From policies to statistics to financials, the insurance world lives by the information flow. There are no widgets or tangibles in the insurance world, only the culling and collecting, management, and sharing of information throughout the data chain. Since Web services are also information-centric, the marriage of these worlds is a natural. Web services, supported by XML intelligence behind the data, enables quicker and more accurate data flows regardless of systems and platforms used. The ultimate goal is to foster system integration both internally and externally and improve efficiency and communication.

ACORD is migrating and merging its work on forms and XML standards into the Web services arena, creating smart electronic forms – e-forms. The first step is to take established static forms and make them fillable with an intelligent XML back end. This is not new technology, but it is an improvement and will serve as a template for even greater efficiencies down the road. Agents using these eforms can enter data directly on their PC instead of having to print and fill out blank forms manually. The e-forms can be completed online and then saved, e-mailed, faxed, or printed. They can also be downloaded blank and completed later. The first of these new forms is ACORD's online fillable Certificate of Liability Insurance e-form. Certificates are among the industry's most heavily used items and are often reused or edited. ACORD expects to have many e-forms available on its Web site by early 2004.

Flexibility is another benefit with e-forms. By being able to receive data in XML format, participants along the entire processing chain can make better use of it than if it had come in just as plain text. For instance, they can reuse it, link it to other forms, or integrate it into either a back-end system, a local database, or elsewhere.

E-forms will have intelligence built in. They'll help guide users as they fill in data. For instance, a form might catch something as simple as an invalid date, such as June 31.

Software Vendors Getting Aggressive
Major software vendors have announced several strategic partnerships with ACORD around Web services in support of its Advantage Program for agents and brokers. (Advantage provides agents and brokers with unlimited access to ACORD forms, along with tools and other services to help improve workflow and business operations.) The partnerships include: