Vendor engagement and collaboration are making the difference
By Chris Newman, Acord
As anyone who has been involved in the London market for any significant amount of time knows, there have been numerous attempts to modernise the market with (all too often) only limited degrees of success.
There are a number of factors behind why previous attempts have not been fully maximised. It is never easy driving change across a whole marketplace – let alone the largest one in the world – and across so many important stakeholders with differing views and capabilities, especially when you also introduce new processes and technology into the mix.
A fundamental challenge has been effectively engaging with the vendors that will be providing the key systems powering the business. It is one thing creating a market vision, arranging the required funding and getting the practitioners all aligned (that is tough enough as it is), but actually implementing the changes successfully as a market is a completely different kettle of fish.
Solution providers are ultimately acting in service to the re/insurers, brokers, managing general agents, coverholders, syndicates and others, but any successful market-wide digital transformation depends on the vendors. Yet vendor engagement has often been relegated to the last step in the process; they need to be brought into the conversation early, where their expertise and input can be meaningful.
In the past, there has been a significant missing ingredient – an elusive, almost magical “something” that enables the participation of all parties regardless of their stage of digital maturity, from practitioners still using paper, spreadsheets, email and manually keying in PDFs to those with more advanced systems that can plug directly into an application programming interface (API) service. This is the insight that drove Acord Solutions Group to create the industry-owned Adept (Acord Data Exchange Platform & Translator) – and in the process, we learned several other important lessons.
Some context: Adept was designed and built to be used by the entire global insurance market, and to scale to meet those demands, with the sole purpose of standardising and simplifying data and message exchange between all stakeholders in the worldwide insurance ecosystem. Whether you are starting with paper or already engaged in e-messaging, Adept undertakes the necessary automation in the background to create seamless real-time data exchange, saving the industry billions in the process. Think of the banking world’s Swift, but for insurance. That is Adept.
Data standards and interoperability allow vendors to focus on true sources of competitive advantage and enable them all to grow using a common language
The first major lesson of the Adept project involves vision. Acord’s vision is clear: we are a not-for-profit, industry-owned organisation that enables the success of the global insurance industry by helping it to leverage the flow of standardised data across all stakeholders. With 50 years of industry service and more than 36,000 participating organisations, we already knew what our members wanted, so we started in a different place compared to most modernisation efforts. We talked to the vendors first – the ones that truly make it happen in support of their own clients, the backbone of the industry: the practitioners. Acord Solutions Group is in a unique position to bring that ecosystem together, acting as “the vendor’s vendor” to drive success through network effects.
The next lesson? Collaboration. By working closely with the vendors and other Acord members, we are driving significant strategic transformational projects that enable digital transformation and fulfil our community’s vision. Now 95% of the key vendors in the London market are connecting to Adept and passing its benefits on to their clients. Data standards and interoperability allow vendors to focus on true sources of competitive advantage and enable them all to grow using a common language.
The final lesson is the true potential of an industry standard global data exchange – something we guessed at in the early stages, but has grown clearer as the market embraces it. Once you connect the ecosystem globally the efficiency gains across both existing and future processes are game-changing. For instance, if you can capture a risk in a standard format in one part of the continent, validate it, rate it and send it to London in real time – directly into a marketplace and even carriers’ admin systems – then you do not need bordereaux and outdated, non-digital legacy channels. Needless to say, there are significant accuracy, cost, timing, control and other gains that are just waiting for vendors and their clients to leverage. We will see a paradigm shift in thinking once we have joined all the pipes up.
As an industry-owned utility, Adept is a key component of many global projects, all of which leverage it in their own unique ways. For example:
The modernisation programme announced by Lloyd’s, DXC Technology and the London market associations will use Adept as an integral piece of the systems that will radically transform processing across the entire market, allowing hundreds of stakeholders to reap the benefits of next-generation technologies;
Sequel Business Solutions is leveraging Adept as part of its Sequel Hub and Rulebook solution. Adept will automatically extract data from PDFs and transform it into Acord standard data for Rulebook to process on its carrier rating platform, saving millions over the existing processing methods; and
Ruschlikon, a group of the world’s largest reinsurers and brokers, is leveraging Adept to enable unified messaging across an entire country – Italy – connecting all of that market’s stakeholders. This implementation paves the way for other hubs across the world, including France, Spain and across Asia.
Having been fortunate enough in my 30-year insurance career to have traversed both general insurance (starting off as a lowly motor underwriter, manually underwriting risks from rating guides) and large commercial and complex specialty markets, I can say this is a familiar story. When automation hit the general insurance space – rather suddenly, in the eyes of industry veterans – it did not replace professional expertise; rather, it stripped time, cost and effort out of the admin side, sped up the whole process and allowed them to focus on their core tasks.
While we do not want meerkats and opera singers writing our aviation and terrorism books, the London market will benefit from similar streamlining, allowing its highly skilled brokers and underwriters to do what they do best: write profitable business in the most efficient and controlled manner. Adept, made possible by a forward-thinking, collaborative vendor community, is enabling that journey.
Chris Newman is managing director, global at Acord