Straight-through processing is the only viable long-term solution to tackling the re/insurance industry’s ongoing challenge with out-of-control expense ratios, but is about people as much as technology, was one of the key takeaways from ACORD’s latest quarterly London event.
The event, entitled Global Reinsurance and Large Commercial (GRLC) Framework – Empowering London Market Straight-Through Processing, covered a range of issues including placement, claims, technical accounting and settlement from both an insurer and broker perspective. Participants included Simon Squires and Helen Griffiths from AXA XL, Tunu Sokiri from BRIT and Julie Gooch from Willis Towers Watson.
Chris Newman, Managing Director of ACORD in London, said: “Today’s session highlighted that those who have made great progress towards straight-through processing haven’t done so overnight. The scale of change can be overwhelming and a common success factor is to start small – run tests, fix bugs, get comfortable and confident with the process then roll it out more widely.
“Those who have successfully been through the process have found that the costs associated with implementation don’t arise from flaws in the technology or the standards, but rather from human error in using them. The success of straight-through processing isn’t just about implementing a system and adopting standards but on managing the change around them, shifting people’s mindsets, making them aware of the benefits and providing them with adequate training.”
There is however a light at the end of the tunnel. Leading players in the re/insurance industry participating in the Ruschlikon Initiative have been able to utilize ACORD GRLC Standards to improve their back-office processes to generate faster cash, higher efficiency, better information and enhanced client service.
Chris Newman said: “There is a burning platform for change in the insurance industry. Disjointed and unaligned processes are frequently generating thousands of queries, wasting millions of pounds and requiring the need for extensive administrative support that adds no value.
“But the good news is that the infrastructure exists to drastically reduce the administrative burden on all stakeholders in the insurance value chain by using one set of consistent, inter-linked, GRLC messages that build a straight-through processing model for commercial insurance transactions. The ability to have everyone plug into the same system removes a huge amount of pressure on re/insurers and brokers. People have been developing a range of platforms to help enable straight-through processing but the lynchpin is that we all need to be talking the same language – ACORD Standards deliver that consistency.”
As the global standards-setting body for the insurance industry ACORD has been responding to demand for straight-through processing and working with its membership to create assets and services that make adoption easier for all stakeholders.