ACORD began in 1970 as a not-for-profit organization formed by insurance carriers and agents to focus on standardizing the many proprietary applications and forms used by carriers at the time for new business and claims reporting. In the late 1970s, ACORD began developing electronic standards to complement the standardized paper applications. Today, ACORD data standards have moved beyond property and casualty insurance to include life, surety, and reinsurance markets.

ACORD has greatly improved the ability to share data — beginning with paper forms and now including electronic data — between insurance agencies and the insurance companies they represent.

Yet, it seems to me that ACORD data standards are not actually standards—they are suggestions.

True standards means that all parties to the transaction treat data in exactly the same way. True standards are enforced by the standards organization. True standards means an individual company cannot use a “flavor” of the standard. True banking industry standards are the reason why you can withdraw cash from your bank account from any ATM machine virtually anywhere in the world.

This is not what we have in the property and casualty insurance industry.

When I ask the question in presentations: “Does personal lines download work?” The general consensus is that it works “pretty well.” After 20 years it only works pretty well? For commercial lines the consensus is it doesn’t work at all.

There have been several discussion threads on the ACT LinkedIn group about how well download is currently working. Here are some comments that illustrate this issue.

• Mica Cooper comments about the difficulty of implementing multiple data models that ACORD has created over the years. “Not having a common data model leads to money being spent on employees and consultants to constantly map data in code, and the need for standards personnel to spend years doing it as well.” He also said, “the main problem [is getting] that data into a fixed format long enough for vendors and carriers to implement it. A moving target like ACORD has presented is very difficult to hit.”
• Denise Magness highlights the problems created for an agency when she states: “We use CL download—but there are data errors and missing info with every company we work with. We have found download is NOT something that can be assumed to be right.”
• George Page, President at Page Insurance, says, “The quality of data that is downloaded to our agency management system varies greatly, depending on the carrier.”
• Angelyn Treutel Zeringue comments, “My agency has found the carriers and vendors are very willing to assist with resolving any problems with downloads, and we use download with every carrier who offers it, and we find it to be a tremendous productivity tool for our agency.”

If an insurance company or agency management system vendor has implemented ACORD data standards, then why does an agency have to worry that downloaded information is not something that can be assumed to be right?

Let me be clear. ACORD has done a great job over the years working to standardize the flow of information and data needed by the insurance industry. As I see it, the problem is that ACORD cannot mandate and enforce the use of the data models/data standards that have been created. They are a membership organization that relies on dues-paying members to continue to operate.

Download and Real-Time have had a very positive impact on the industry and an agency’s ability to streamline internal processing. Let’s continue to make sure the industry can gain full advantage of seamless data sharing by actually enforcing the use of ACORD standards.

What do you think?