18 April 2012 Volume 3, Issue 16
Headlines and Information
1 Q&A: Agile Development and You
2 Hidden P&C Policy Admin Project Costs and Challenges Revealed
(Insurance Networking News)
3 Predictive Modeling Takes Away Insurers' Guesswork (Tech Decisions)
ACORD Certified Expert
4 ACE Now Accepting LOMA ARA for Industry Ed Requirement
5 City of Los Angeles Creates Efficiency, Slashes Costs, Increases
Compliance (2 of 2)
6 Reducing Costs, Improving Accuracy, Workflow for MVRs
Life & Annuity
7 ACORD 951 Released and Ready to Implement
Property & Casualty
8 P&C Perspective: 2012 Priorities
9 ACORD's Exposure Reporting Standards – More Crucial Than Ever
10 Analytics: Information Leads to Better Bottom Line (VID)
Headlines and Information
1. Q&A: Agile Development and You
by Michael Carroll, ACORD
Since ACORD first announced the Agile Standards Development Organization (aSDO) initiative, much
has been written and discussed about it. However, some questions still remain. In a conversation with
ACORD Director of Standards Rick Heil, some of these outstanding questions were addressed.
Michael Carroll: One of the primary questions is how does agile impact the maintenance request
process. Is it altering the flow?
Rick Heil: In reality, no. It's not changing how the information and process flows. What it does do is
address MRs as they come up, instead of waiting for a semi-annual review. The old process had everyone
submit their requests by a certain date and then there were a couple of weeks where everything was
examined, discussed, and reviewed.
With an agile methodology, we're addressing these requests all year long. As a request is received, it is
examined by staff and by the MR Review Working Group. It's the same process, just done differently. It
gives reviewers more time to focus on the individual MRs over a greater period of time.
MC: So the source of MRs remains the same?
RH: Yes, ACORD still receives requests from the membership,
from the working groups, and from the industry. There are also
those regulatory changes which do not require review or vote.
Some change requests go to working groups for further
examination and refinement.
Basically, nothing in this process has changed. What has changed
is when we address the requests. It's now spread out over the
entire cycle rather than all in one group at the end.
MC: Is this the same for all of ACORD's communities?
RH: At this time, some of the communities are operating on different cycles due to special needs such as
those for Australia or Southern Africa. Property & Casualty, Life & Annuity, Reinsurance, and Common
Services are all part of the aSDO now and follow the same dates.
MC: How else is the process being streamlined?
RH: We're implementing tools that will support our process workflow to make it more efficient. Again,
they aren't changing the flow, just improving how it works. The goal is efficiency, speed, and
The implementation of Message Forge was one major step forward so that our transaction specifications
are easier to update, available quicker, and can be better used by the members. This will give members a
more consistent and clearer specification to work from and get make that information available more
quickly. Similarly, we're working on an issues management platform that will make requests for changes
easier, coordinated across all groups, and provide better tracking abilities.
ACORD is using technology to enhance the system and better respond to member needs. That's really the
MC: Will this agile methodology impact the way that MRs are reviewed?
RH: The review process now has two levels of review: The technical working groups and the MR
Review Group prior to full member review.
The first review is by the technical working groups and their subject matter experts (SMEs). They
explore the stated business problem, analyze the associated business needs, and make their
Then, they go on to the MR Review Group for a holistic review of each proposed change. The Working
Group receives the recommendations from the technical side and considers the changes in a broader
context which can be across the individual Standard or even across programs.
Finally, as we've always done, there is a membership review prior to plenary and voting. This workflow
ensures that all issues are considered and all sides are heard from before it goes to vote.
MC: There have also been changes in the Working Groups over
the past few months. Are these changes related to Agile SDO?
RH: There have been changes which will also improve the
workflow overall. We can use P&C as an example. Within that
community, there are three separate standards ... forms, AL3, and
On the one hand, the Standards are interrelated with a data
element on a form relating to a corresponding data element on a
download. On the other hand, we recognize members have
expertise in one or more of these areas and participate where appropriate.
That's why we now have working groups by the type of Standard so that members can more easily find
an area of interest to participate. They are the Subject Matter Experts in those areas. Others, as is often
the case, will become SMEs in multiple formats of the Standard.
Our goal is to help members participate more easily, become involved more fully, and take part in the
overall process to benefit them and their companies. ACORD is about working together, sharing
knowledge, and helping everyone benefit from Standards.
2. Hidden P&C Policy Admin Project Costs and Challenges Revealed
(Insurance Networking News)
A new report reveals that large insurers are spending nearly three times more
($23.5 million) on policy administration system (PAS) projects than midsize Courtesy of
insurers ($8.7 million), and both allocate around 50 percent of that for internal
services. Findings suggest the significant internal and external costs behind the
average P&C PAS project may be worth it, as insurers that have completed such
a project have experienced improvements of more than 25 percent in speed-to-
market and data accessibility.
Change management, communication and fear of change-all relating to internal culture-were identified as the
biggest challenges during these projects. Other challenges mentioned were staying within the project's
capability and "scope creep." And, in dealing with vendors, insurers reported difficulties with vendors not
know the business and a lack of available resources.
3. Predictive Modeling Takes Away Insurers' Guesswork (Tech Decisions)
The word prediction brings up a lot of negative connotations. We often laugh at
predictions made about who will win an election or a Super Bowl, but insurers Courtesy of
aren't laughing at the predictions they are able to make about customer behavior
that allows them to draw up models that limit exposure to risks.
ACORD Certified Expert
4. LOMA ARA Now Accepted for ACE Designation
by Michael Carroll, ACORD
The ACORD Certified Expert (ACE) program is now accepting LOMA's Associate, Reinsurance
Administration (ARA) as proof of industry knowledge for the ACE designation. ACORD received a request
from a member asking if this could be accepted. It was granted acceptance and a link is now available from
the ACORD ACE website.
The ACE Designation consists of three parts:
The first exam focuses on ACORD's history, standards development process, operating procedures,
maintenance request process, and related topics.
An understanding and knowledge base of the insurance industry is essential for proper standards
implementation. Click here for a list of qualifying industry exams.
The third component is domain-specific standards knowledge from one, or more, of ACORD's
Standards domains (Life & Annuity; Property & Casualty; Reinsurance).
ARA fulfills the Industry Knowledge requirement.
LOMA's Associate, Reinsurance Administration™ (ARA™) Program helps participants grasp reinsurance
principles, the financial importance of reinsurance, and the development, administration and auditing of
reinsurance products. Areas covered by the course include:
Key players and the reasons for using reinsurance
Laws and regulations affecting reinsurance transactions
Provisions of a reinsurance contract and how they affect the administration of reinsurance
Processes involved in the administration of new business, in-force business, and terminations
More information on the ARA is available here.
5. City of Los Angeles Creates Efficiency, Slashes Costs, Increases Compliance (2
by Michael Carroll, ACORD
Last week you read about Track4LA and how the City of Los Angeles used technology to solve a business
problem. This week, hear the results of their efforts and what is coming next.
As of February 2012, more than 65% are providing the certificates through this self-service process. The
overall goal is to get close to 100% of certificates processed through Track4LA®.
The Track4LA® solution includes numerous features to fulfill the City's vision and support the various
communities. Features include Broker license validation, NAIC Code look-up capabilities, and a pre-fill
process to re-use existing ACORD 25 data, eliminating the rekeying of data for renewals. With built-in
verifications and data checks, it makes completing the certificate easier and more consistent, and the Broker
receives instantaneous approval upon successful submission. In addition, contractors receive an e-mail
notification in advance of their insurance expiration dates.
In addition to achieving greater efficiency, the City projects annual savings by all parties. In addition, surveys
of participants show customer satisfaction at 4.3 out of 5. Other signs of success include:
More than 12,000 certificates processed self-service to date
More than 5,000 brokers registered
Projected savings at full capacity of $1.3M for The City and $2.6M for the Business community per year
Track4LA® is receiving positive reviews from both the contractor community and broker communities.
Bill Jacob of Christiansen Amusements is a contractor with the City
of Los Angeles and supporter of Track4LA. Jacobs states "The new
Track4LA® online system is a valuable time saving program. It's a
much more efficient and simpler means of submitting and obtaining
immediate approval on our new insurance certificates".
The film industry is a prominent community in Los Angeles. Film
production requires consistent and immediate insurance approvals
and fuels the local economy. Edward Minkowski of ARG Insurance
Services comments on Track4LA's ability to meet his needs in
serving his clients in this community. "Great system! For short film
production, the insurance certificate can be submitted and approved
Sam Stickler, VP of Business Solutions of Novanis credits the success of Track4LA® to Victor Parker and
his team "doing their homework" to define a solid business case. Stickler states "Victor Parker's leadership
and commitment to the system is key to its success. It goes beyond rolling out the initial version of
Track4LA®. Victor and his team are diligent with strategic outreach
campaigns to the user community. There is a clear commitment to ACORD Video
implementing the enhancements needed to increase usage so that
greater benefits can be achieved".
The Track4LA® Community
To provide a more streamlined approach to customer service and to
further increase user adoption, the Track4LA Community website was
launched. Spearheaded by Interactive Enterprise Solutions (IES), the
site was developed with investment funds donated by IES, Adobe, and
Novanis. The site delivers relevant information to the Track4LA®
Community as well as encourages and facilitates feedback and
collaboration through blog posts and comments. Subscribe to the
Community site to receive Project updates via e-mail. Click on the graphic to see Ann
Henstrand, ACORD's Chief
Compliance Officer, discuss the
What's Next? Track4LA Solution.
Many brokers submitting insurance to the City must also submit the
same insurance documentation to neighboring cities and counties. The City has already partnered with the
Port of Los Angeles, which is currently accepting and validating insurance with Track4LA®, spreading the
savings and efficiencies.
"This implementation of ACORD Standards shows how creative problem solving can not only increase
efficiency and accuracy, but become a time and cost saving proposition. With this system, insurance brokers
save time servicing their policyholders with an up-to-date, compliant form. The City of Los Angeles and
Novanis should be congratulated for this solution," said Ann Henstrand, Chief Compliance Officer,
Government and Industry Affairs, ACORD. "This solution will inspire others to utilize technology to solve
real business issues."
For questions or more information about Track4LA, please contact Lisa Stotelmyre at email@example.com.
6. Reducing Costs, Improving Workflows with MVRs
By Johnell Johnson, ACORD
Saving money and increasing accuracy and efficiency wherever
possible is a priority for every type of insurance organization
from the largest insurer to the smallest agency, but it can be
difficult. For members of the Professional Insurance Agents of
New Jersey (PIANJ), providing choice for their NJ customers is
their goal. With today's automation, clients can go to websites to
secure quotes from direct writers of auto insurance. The Direct
writer workflow is designed to provide competitive quotes. For
the independent agent, providing data that all the carriers can use
to provide an accurate bindable quote is the challenge.
To address the issue, PIA NJ has dusted off the industry white
paper on Optimal Rating Workflows underwriting costs and
they've created a taskforce to actively seek a solution that works.
Right now the process is in real time, yet the data may vary
depending on when reports are run. One of the reports, a Motor
Vehicle Report or MVR, is defined by iSeeCars as "a record held
by the state containing licensing status, violations, suspensions
and other infractions a driver has had over the last several years.
Auto insurance companies use the MVR as one of many factors
to fairly determine a policy premium, based on the probability
the policyholder will have a future claim."
"Everybody has to work together on this. It's not an association issue or an agent, broker or carrier issue. It's a
cost of placing business issue. So, we're all working together as much as possible with a common goal in
mind and that's to reduce the cost of placing business," said Keith Savino, PIANJ President and a member of
the ACORD Board of Directors.
"This initiative will help us to create a more consistent workflow," said Keith Savino, PIA NJ President and a
member of the ACORD Board of Directors. He went on to say that the current process has negatively changed
the way some companies do business, depending on the state. One area of concern is the timing of the data
pulled that is found on a motor vehicle report. Some agents don't initially run a motor vehicle report at the
beginning of the workflow because fees can be as high as $27 for each report and each individual on the
Also at issue is the fact that if the business is not written with the carrier, the agent may still pay for the MVR,
because whether they write the business or not they incurred the expense to secure quality data. Savino
believes that sharing data between all the carriers will help reduce or eliminate costs and make the workflow
faster, easier, and more accurate.
"It will allow us to have a quicker more finite response to our client because many of the carriers now have
gone from auto-running the reports to only running the reports when we click the button to submit data to the
carrier which means the quote we got initially was not correct," Savino added.
Cal Durland, ACORD Director of Member Relations and
taskforce member added that "In some cases, once the agent and
customer agree on a quote to work with, the agent says, it's
bound and the company goes back and runs the report. However,
running the report could change the quote if there are
discrepancies between the information secured from the client
and the data provided on the MVR."
PIANJ has invited all agents impacted by this workflow
including those represented by the Insurance Agents & Brokers of
America and PIA chapters in other states to work on the issue.
Savino plans to propose a formal solution by June.
To learn more about this issue and the proposed solutions, attend the Lunch & PIA NJ Initiative –
Implementing the Optimal Workflow for Rating session on Tuesday, May 15 from 12:00 PM to 2:00 PM at
the AUGIE meeting just prior to the opening of the ACORD LOMA Insurance Systems Forum at Rosen
Shingle Creek, Orlando, FL.
Life & Annuity
7. ACORD 951 Released and Ready to Implement
by Michael Carroll, ACORD
The ACORD 951 – 1035 Exchange/Rollover/Transfer Form was recently re-
released. Last year, one set of changes was made to comply with IRS Code Changes. ACORD Video
Now, a Maintenance Request (MC) approved by ACORD Members in November
2011 is now available.
An MR was submitted requesting that we expand the signature fields to
accommodate Insured Retirement Institute (IRI) eSignature requirements.
The MR requested that the Form signature field be 3.7 inches in width by .32 inches Click the image
in height to accommodate the 2-line signature block. to see Yolanda
Today, that field is updated and a new version of the Form prepared for release. discuss the changes
in the form.
"As technology continues to evolve with innovations like eSignatures, ACORD
forms and eForms are changing to keep pace with industry needs. Thanks to members working together, we're
all able to get these enhancements done and out to the users," said Yolanda Austin, Program Manager,
The new version of the form is available on the ACORD website.
Modified signtuare fields to accommodate eSignature capabilities
Property & Casualty
8. P&C Perspective: Priorities and Accomplishments
by James Bielak, ACORD
ACORD's Property & Casualty Steering Committee recently approved
the priorities for 2012. Many of them continue our overall objective of
improving the Standards and process as well as encouraging
participation. However, they've expanded and refined the individual
goals for the year.
Refine and Enhance Standards
P&C Forms, AL3, and XML continue to grow and evolve each year.
Standards are always changing to meet the industry's marketplace
requirements and the objective is to stay ahead of the curve. The
Committee will also be encouraging changes in the overall Working
Group structure to make it more efficient and better utilize the
strengths and knowledge of the participants. Along with all that, not
only are they refining the process and Standards but also the specific
deliverables to make them easier to use. James Bielak, Program Manager,
Refine and Enhance Standards Development Processes
By now, every reader of this newsletter should know about the Agile Standards Development Organization
methodology being employed across ACORD. There are also new tools such as Message Forge being
implemented to streamline the process and give you consistent, clear deliverables that will be easier to use.
Some things are already underway. Others are being rolled out over the coming months. The overall objective
is to take advantage of current technologies to improve our overall process and interactions with you, the
Build Awareness and Expertise of Standards
Knowledge is the key to anything and Standards are no exception. The Committee takes that to heart and set
out a goal of spreading knowledge and education across the P&C community. One way will be through the
cultivation of new P&C ACORD Certified Experts. They also want to encourage P&C members with more
resources and easier ways to find and obtain the documents they need to best use the Standards.
Refine and Enhance Communication
Spreading the word about what's being accomplished is essential.
That's why I have this column so I can talk to both members and
non-members directly about what's happening. You can also
follow P&C on Twitter - @acord_pc.
The Committee also wants to spread the word about P&C
Standards through the many strong ties ACORD has with other
groups such as AUGIE, ACT, Agency Management System User
Groups, and others. The more that people know and understand
the value of Standards, the more they'll get involved and use
You can also help spread that word. If you're reading this newsletter, encourage everyone you work with to
sign up. The price is right too, it's free. Get your coworkers involved and up to speed on what's happening
with ACORD and Standards.
On behalf of the P&C Steering Committee and ACORD, I want to thank all of you who have been actively
participating in the Working Groups, coming to events, and being a part of the process. If you're not involved,
don't be left out! Get involved and become part of the great work being done by ACORD's P&C Community.
9. ACORD's Exposure Reporting Standards – More Crucial Than Ever
by Michael Carroll, ACORD
It's certainly no secret that the insurance industry has been heavily
impacted by both natural and financial catastrophes over the past couple of
years. This makes the ability to gather, share, and utilize exposure data
even more critical than ever, particularly using ACORD's Standards.
What is critical for the insurance industry is to ensure that exposure data is
consistently shared between business partners and internally. Insured losses
include business interruption, property, and loss of life. The ability to
mitigate these risks requires accurate, current, and usable catastrophe data.
"An ACORD Working Group has been developing an industry standard
exposure report for use across the insurance value chain, capturing and
sharing consistent, reliable exposure data from primary insurers through to
reinsurers and beyond. The spreadsheet–based standards have been
available for some time. Now, ACORD is pleased to announce the release
of the XML standards," said Puneet Bharal, Director of Implementation
Services for ACORD and facilitator of the Working Group.
Natural catastrophes not only appear to be on the rise, but impacting insurance markets around the globe.
With many insurers and reinsurers in particular being global today, what happens in one region can have a
ripple effect internationally.
"Implementing the ACORD Standards helps everyone - insurers, reinsurers, and brokers better communicate
their exposure data more quickly, easily, and accurately. In the time it takes to rekey or manipulate the data so
it can be consumed by the system, another catastrophe could take place. Speed and accuracy are critical and
that's why ACORD's Standards are essential for this," said Maggy Leon, Director of Implementation Services.
"Much of what happened over the past year was outside of what catastrophe models predicted, reminding the
industry again that cat models are a useful tool, but we must maintain good underwriting practices and
diversify portfolios to ensure we are not over-exposed even in non-cat zones. Standards-delivered reliable data
enables your business to better collect, assess and understand – and so, manage – its exposures, Bharal added.
For more information, click here.
10. Analytics: Information that Leads to a Better Bottom Line
by Johnell Johnson, ACORD
Albert Einstein once said that information is not knowledge.
While that may be true, the way you interpret and use the ACORD Video
information you gather can lead to a much better understanding
of your business.
Analytics is a multi- billion dollar industry based on the
application of computer technology, operational research, and
statistics to solve business problems. It's increasingly being
embraced by small and medium-sized companies, and it's one of
the many hot topics scheduled for discussion at the ACORD
LOMA Insurance Systems Forum.
"Utilizing data on claims is an exciting topic we will explore this
year. The volume of data that insurance companies have access Click the image to learn more about the
to these days includes the internet, social media sites and third analytics sessions at the 2012 ACORD LOMA
Insurance Systems Forum
parties who collect data. That pool of information is so big, that
it can be hard for some businesses to interpret," said Beth
Grossman, ACORD Chief Learning Officer.
Ian Ayres, a General Session speaker at the ACORD LOMA Forum, has a wealth of knowledge regarding
analytics and believes the coming of age of advanced analytics is here.
"In field after field, the humongous access to new types of data has allowed us to crunch historical numbers to
come up with better predictions." Ayres said. "You have to fight the urge to say 'what I do is too special to be
improved by quantitative analysis.'"
Ayres will highlight the benefits and risks of data analytics, who loses and who wins, and how "super
crunching" can be used to help make better decisions.
In addition to Ayres' presentation, this year's ACORD LOMA Forum features several other sessions focused
on this buzz topic, including:
Next Generation Claims Analytics: Five Areas Claims Executives Must Invest In
TowerGroup's Karen Pauli will focus on how carriers can benefit from the growth in external data coupled
with top analytic solutions to deliver unexpected financial results.
Harnessing Analytics for the Claims Life Cycle
Stuart Rose of SAS and Jose Trasancos from Utica National Insurance Group will outline their use of
predictive analytics to better manage resources, increase performance and extract the greatest possible value
from their technology investments.
Visit the ACORD LOMA Forum website at acordlomaforum.org for the full agenda and to register. Hotel
reservation discounts continue through April 20th.