Acord - Early or Late Adopter: Is now the time to upgrade?

Written by 
Rate this item
(0 votes)

The advantage of adopting Acord message standards is the potential to develop STP (straight through processing) with business partners from around the world.  STP reduces the amount of manual checking and reconciliation that is required and will eliminate the need for rekeying and the errors that this brings.  But is now the time to upgrade?  We think it is.

At Wisereach we have a ‘history’ in the development of business process and electronic support in the London Insurance market.

A long time ago, in a previous existence, Brian Browne, one of our Directors was the project manager for some of the earliest electronic initiatives in the London Insurance market.  These included, in 1986, the very first Slip Registration System - which itself was the only surviving element of the first attempt to introduce automation into the London Market, the ill fated Room Support System (RSS) and the Lloyd’s Electronic Placing Support System (EPS).

The Head of our Insurance Practice, Chris Stratford, has also seen his fair share of market initiatives through his involvement in the design and implementation of the more successful BSM, SCM and USM EDI messages.

Indeed, during those faltering first steps towards electronic support of the business process, the varying desire for change amongst participants became apparent when we realised that at least one Managing Agent was receiving the new EDI message only to get a third party to convert them back to punched cards.

It is clear that progress in the London Market towards greater automation has been two steps forward and one step back over the past twenty five years.  As well as the failure of Slip Registration and EPS there has been Kinnect in 2006 and numerous other initiatives with even Ri3K only now starting to gain traction.

With, at a conservative estimate, £11M invested centrally into EPS and £70M invested into Kinnect; and the investment into various claims initiatives shaded into insignificance by the amounts invested by software vendors and market participants, is it any wonder that the ‘late adopter’ mentality seems to prevail in the market?  The people who invested heavily in the initial electronic initiatives lost a lot of money on a number of repeated occasions.

Have the setbacks resulted in a long term late adopter mood throughout the market?  If so, is this mindset holding London back as the most effective centre for placing complex insurance risks?

We believe, that the answer is a qualified no.  Clearly, progress has not been as fast as some of the early adopters would like.  Only around 16% of risks placed in the London Market are supported through an electronic process such as Ri3K at the moment.

However there are clear signs that lessons have been learnt from the past and indeed that  each of the early initiatives has left some legacy that has been incorporated into the current progress culminating in the thinking of the LMG and central bodies.

From EPS came the Unique Market Reference, the early thinking around the standard slip, the idea of the central document repository and the early thinking around separating the technical and financial accounts.

The failure of Kinnect reinforced the thinking that change had to be business led and that for IT initiatives to work they have to be enablers that the practitioners see as a support to their business and not just IT led solutions.

The current hierarchy in the London Market are talking the talk that this lesson has been learnt and this is showing in the strategy since 2006 and is, in turn, reflected in adoption rates.  At the latest LMG seminar David Harris, from Amlin, presented some interesting statistics showing the move in market sentiment since 2006 for the Electronic Claims File and also the positive impact the IMR has had on processing speed.

The Endorsement pilot has high levels of adoption and this will be a significant step forward for the market. The document repository is clearly seen as a big success and cost savings can be demonstrated.

So the tide seems to be slowly turning. As technology becomes an ever more essential part of all businesses, the use of technology as a support tool is becoming less and less of an issue.

There is, however, still a residual reluctance to invest money into change in the London Market.  The universal adoption of Acord standards remains a sticking point that needs to be addressed.  It is, and always has been, in the market’s interest to expose itself to the world via open standards, yet it is difficult to sell the benefits of investing in ‘standards’.  The late adopters have been proven right in the past, so why should participants move forward now?  Why not just wait and see?

We believe the answer is simple.  If you look at the early adopters who lost some money in the early initiatives it is clear that they also learnt something.  In the main, the Brokers and Carriers driving the pace of change for the last 15 years are the leading Brokers and Carriers now.

As Consultants, we could be accused of having an early adopter set of rose tinted glasses on but we believe that now is the time for the market to embrace change.  We are continually talking to market participants to find out what they really think of the proposals being pushed by the LMG and whether they feel that lessons from the past have been incorporated.  If you would like to get a truly independent viewpoint we’d be delighted to share our thoughts with you and hope that we can feed back some insight as part of the process.

For help on getting the most out of Acord contact This email address is being protected from spambots. You need JavaScript enabled to view it.

Peter Weare

Industry leader in digital transformation. Passionate about delivering a frictionless consumer  experience. Regular commenter on getting delivery right.

 View Peter's LinkedIn profile View Peter's profile