A persistent problem in delivering the insurance product quickly and accurately to the consumer is that there is no uniform way for all the players behind the scenes to communicate. There are way too many human touches and reentry of information for little pieces of policy and claims processing. And the whole thing takes way too long.
That’s changing, finally. Here’s a term to remember: “eXtensible Markup Language,” or XML. It provides data and context among computer applications; it defines data formats and content in a way that is portable.
Who cares? You do. Because these new services are part of the insurance food chain, you’ll use a standard Internet connection to rate, obtain, and share information back and forth in real time—not in 24 hours or two weeks—from whomever has it, said industry technology consultant Steve Anderson.
What this ultimately means for agents is getting back to insurance, not re-keying customer data or policy information. It’ll be just like telephone switching systems, says Greg Maciag, CEO of ACORD, the industry standards organization. You don’t need to worry about how the telephone call goes through; you just simply need it to go through.
ACORD is building the XML “dictionary” for the entire insurance business, and much of it is done already. Simultaneous with that, it has opened its membership to new players beyond p/c agents and carriers; the organization has grown to 200 vendor members from just 20 seven years ago.
“That is healthy for our business,” Maciag said. “Real estate firms, credit bureaus, information providers, online MGAs, banks, and brokerage firms all are involved. It’s the horizontal and vertical integration of XML.”
For example, a client buys a new car. The auto dealer sends the new vehicle information in an e-mail in which the agent’s management system can understand and then add the data to the client’s record. “A VIN number is a VIN number, whether an agent, carrier or the manufacturer uses it,” Anderson said. “So, instead of asking our clients a whole series of questions about the new car they purchased, all they have to provide is the VIN number, and we go to Ford and get all the specific vehicle information we need to add the car to the policy. And this happens live in real time.”
Rick Morgan, executive vice president of ConfirmNet, a San Diego-based provider of online certificates of insurance, agrees. XML “will allow agencies to access and exchange data just beyond the agency-carrier model.”
With XML, “it’s much easier to bring in third parties if the agency is trying to expand or round out data that they have about customers,” Morgan said. “They can access data from other sources, like the DMV, auto manufacturers, banking records, financial records, and other applications like Quicken. We’ll have integration with all financial services and share information across traditional boundaries. So now I as an agent have a much more robust knowledge base about my customer…without new entry.”
Several agency management systems, including Applied Systems and AMS TowerStreet, have begun adapting to XML. But most agents haven’t a clue what this all means to them.
Mike Bradley, who designs technology requirements for an online MGA called Personal-umbrella.com, said: “The agents will be heavily reliant upon their management systems vendors to integrate with the insurers and all other related parties. Most agents…know the dilemma lies with their management systems’ programming and conflicts with the insurers’ automation processing. “If I were a retail agent, I’d let insurers and ACORD pay for the development and implementation. I would only use the technology once it became commonplace and stable.”
But Bob Payne, CEO of industry communications network IVANS, recommends agents keep their agency software and systems relatively current. “As the technology is adopted, new features tend not to be added to older versions of systems. Holding off on upgrades awaiting a single major breakthrough in XML—or for processes to be perfected—is not likely to be a smart strategy. It’s not realistic.”
Anderson suggests advocacy to move things along more quickly. “What agencies need to do now is speak with a common voice to get carriers and vendors committed using XML to share data. ACORD has done a good job of creating the standards necessary to make this work. But if all parties to the insurance transaction don’t cooperate on this issue we’ll be shooting ourselves in the foot once again.”
Agents with the user group of Applied Systems, called ASCnet, are hitting the road this spring to evangelize the advantages of XML with company senior executives.
Peter van Aartrijk Jr. owns a communications firm specializing in the independent agent distribution channel. To comment on this column, send e-mail to firstname.lastname@example.org.
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