Acord Framework

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Detailed doc on acord framework

Transcript of Acord Framework

  • P R O G R E S S P E R S P E C T I V E

    Cindy Maike

    Founder, Smallwood Maike Associates

    Updated by

    Deborah Smallwood

    Founder, Strategy Meets Action

    B U S I N E S S M A K I N G P R O G R E S S

    www.progress.com

    > ACORD fRAmEwORk

  • TAblE Of COnTEnTS

    Preface 1Executive Summary 2Embracing Change in the Insurance Industry 3The need for new business Integration and Interoperability

    Capabilities 5learning from the Past 6A new Approach to Enterprise business Architecture 6ACORD framework Initiative Enables Change in the Insurance

    Industry 9what the ACORD framework means for the Insurance Industry 10A Common Information model for the Insurance Industry 12Positioning for the future while Retrofitting the Past 13A Call to Action 15About Strategy meets Action 17

    www.progress.com

  • 1PREfACE

    This is an update to a white paper that was originally written by Cindy Maike, Founder, Smallwood Maike Associates, and released for Progress Software in January 2009. The update, supplied in 2011 by Deborah Smallwood, Founder, Strategy Meets Action, reflects the current insurance industry environment and the evolution of the ACORD Framework since this time. For example, some aspects of the framework discussed in the original paper that were described as future plans are now generally available.

    From an industry perspective, the framework is no longer simply a vision; it is a reality thats currently under development and has seen a positive response from the industry ecosystem ACORD has moved this framework forward very quickly after receiving several contributions of intellectual property, once considered proprietary, along with active participation from business and technology thought leaders With the framework, fragmentation and multiple proprietary formats are being eliminated, and the industry is moving forward to establish a much-needed industry-standard enterprise architecture The framework provides end-to-end assets that will streamline the development of business and technical solutions More importantly, it is technology neutral

    See page 10 for recent updates around the ACORD Framework

    www.progress.com

  • 2ExECUTIVE SUmmARy

    The insurance industry is operating in an uncertain and rapidly changing business environment As the industry slowly recovers from the global financial crisis, there is a new urgency to address major forces such as demographic shifts, increasing distribution channel options, and a heightened competitive environment These forces are directly related to the changing expectations of insurance customers, who are more informed and demanding than ever before, as well as the agents/brokers, stakeholders, and employees who service these customers

    To meet the demands of these customers, insurers must align their business processes to the customer and deliver true end-to-end experiences across the insurance ecosystem This starts by creating a network model that facilitates the exchange and sharing of data between carriers and other key industry stakeholders, including distributors such as brokers/agents and third-parties such as reinsurers, claim service providers, government entities, and regulatory bodies

    This cannot be accomplished without establishing best practices for business integration and interoperability throughout the ecosystem Without standardized business processes and a common vocabulary, connectivity to value-chain partners will remain a costly challenge

    This paper shows insurers new ways to collaborate with agents/brokers, partners, and other members of the insurance ecosystem to deliver a better customer experience The paper discusses why analyzing successes in other industries that have leveraged a common framework to improve integration, interoperability, and communication can also benefit the insurance industry It also details a new approach to business architecture that can provide a formal link between enterprise business strategy and the processes and technologies that support it

    Finally, this paper will explain a framework for the insurance industry that carriers can use to redesign their business processes in order to support demographic shifts, develop innovative business models, optimize distribution channels, and achieve financial profitability This framework has the potential

    www.progress.com

  • 3to unite, align, and link the insurance industry so it can meet the demands of a rapidly changing marketplace

    EmbRACInG ChAnGE In ThE InSURAnCE InDUSTRy

    Many insurance companies are trying to keep pace with the rapidly changing business environment by investing in quick technology fixes that not only end up on the shelf in three-to-five years, but also result in added process inefficiencies, poor customer service, and, ultimately, a decline in profits Other insurers are embracing innovative technologies for online collaboration, business performance management (BPM), and dynamic business processes (business processes that are automatically created and executed using BPM and service-oriented design capabilities) These companies are evolving their business models to think about business processes and capabilities through a different lensone that looks through the eyes of customers and agents/brokers.

    Looking through the customer lens requires business processes that better align with a new generation of customers who are far less tolerant in dealing with redundant business processes and requests for information Given a choice, consumers will choose carriers that make doing business both easy and real-time This requires the industry to design processes that are defined by the customer and deliver a true end-to-end experience across the insurance ecosystem

    In order to design more customer-centric business processes, insurers require a more effective way to connect to their value-chain partners and drive efficiency into their business processes This connection will enable them to quickly sense and respond to an ever-changing business environment (see illustration on following page)

    One way the industry can accelerate achieving these customer-centric objectives is by eliminating line-of-business, information, and system silos and moving to a services-oriented environment This requires more than simply looking inward to increase efficiencies; it requires collaboration with the entire value chain of agents/brokers, partners, and other members of the insurance ecosystem Enterprises in this ecosystem must move toward a networked model in which they combine to deliver better customer experiences

    www.progress.com

    G i v e n a C h o i C e ,

    C o n S u M e r S w i ll

    C h o o S e C a r r i e r S

    th at M a k e D o i n G

    b u S i n e S S b oth ea Sy

    a n D r ea l-ti M e .

  • 4The networked model required to support this change places additional pressures and challenges on the integration of business processes and information For an industry in which data and information functions as the lifeblood, this added demand requires both the industry as a whole and its individual organizations to more effectively share and exchange data to support innovation The exchange and use of data via business processes bind the insurance ecosystem together, uniting disparate groups into a collective whole This will make the industry strong and able to meet the challenges of the uncertain and changing business environment

    www.progress.com

    SPEED OF DEVELOPMENT

    FREEDOM

    SPEED OF ADJUSTMENTTO CHANGE

    CHOICE

    FLEXIBILITY

    BUSINESSCAPABILITY

    AND PROCESSREUSE

    WirelessLAN Line

    Internet WEB 2.0(Instant message,

    alerts, blogs& wikis)

    ReinsurersNCCI, ISO,

    & OtherRegulatory

    CUSTOMER/DISTRIBUTIONINTERACTIONS

    3RD PARTYSERVICES

    InsurerCRS/CRM

    Under-Writing

    Billing/Collections

    ClaimsMgmt

    Brokers &Agents &

    MGS

    Policy holderInsured

    Commercial& Group

    InternetWEB 2.0

    (Instant message,alerts, blogs

    & wikis)

    Forms/Mall

    VRUFax Calls

    CustomerPortal &3rd Party

    InsurerPortals/System

    Agent Broker/MG/Portals/

    Systems

    Medical Providers& other 3rd PartyServices

    State Insurance

    Commissions &Federal Reg.

    Bodies

    Repair Shops,Inspection, &

    other 3rd ClaimsService

    Providers

    INSURANCE VALUE CHAIN CORE CAPABILITIES

    OTHER CAPABILITIES (NON CORE)

    OTHER BACK OFFICE SUPPORT (HR, IT, ACCOUNTING)

    MarketStrategy

    ProductMgmt

    Sales &Channel

    Mgmt

    Under-Writing

    PolicyMgmt

    Billing &Collection

    Claims CustomsRelations

    RiskMgmt

    NS

    MSt

    ANDMOREDATA/INFORMATION

    DATA/INFORMATION MOREDATA/INFORMATION

  • 5ThE