Insurance industry adopts ACORD XML

The industry in which Transamerica Life Canada works is changing, and in order to continue interacting and competing with others in its sectors, the company has no choice but to change with it.

The insurance business is increasingly moving to ACORD (Association for Co-operative Operations Research and Development) XML. Each day, underwriters for Transamerica assess hundreds of insurance applications. To make an informed judgment, the underwriters need access to information collected by other insurance companies, which is fed into the Medical Information Bureau (MIB) database.

As a result of moving offices, the bureau had to dismantle a lot of its wiring and decided to change the way it interacts with its partners. It moved to ACORD XML and decided to connect with its partners online rather than through modems.

MIB mandated that all insurance companies also move over to ACORD XML so Transamerica decided to move its systems over to Microsoft BizTalk Server 2004 in order to accommodate this new communications standard.

“We have a pre-defined interface to do business with our partners now,” says Ben Wong, application architect at Transamerica Life Canada in Toronto.

All insurance companies provide MIB with updated medical records about their clients and MIB acts as a clearinghouse of medical information.

Before moving to ACORD XML, Transamerica used a proprietary server running special MIB software which was linked to MIB via a modem. Information was sent and collected in batches. Since making the switch to ACORD XML, response time has increased dramatically — by at least 400 per cent, Wong says.

This has real business benefits, he says.

“We find that the expectation of users has increased,” he says. They are no longer willing to wait to find out about their applications.

“It’s all about approval. The faster we can do it, the more business we can put through.”

The quality of the information has also improved as a result of the move, Wong says.

Information no longer has to be rekeyed. And underwriters can connect to MIB from their own desk.

Under the old system, underwriters would leave fields such as birth dates blank if they didn’t have that information. This would cause communications failures with MIB and the errors would take a few hours to come to light because information was sent in batches.

Now simple data entry errors are corrected automatically and the number of errors has been reduced.

“You don’t have to rekey all the client information, so we eliminate all the quality issues of having errors. We capture any punch errors up front,” Wong says.

Now when underwriters enter an invalid code, they know right away rather than having to wait a couple of days for errors to come to light, he says.

Seamless transition
Transamerica Life Canada began looking at several different integration tools in 2004.

“We found that BizTalk had the right price point and the functionality we needed,” Wong says.

“What we’ve discovered since is that all of the adapters, etc., that come out of the box have let us build connections to partners faster.”

BizTalk also made the transition from one system to the other system easy, Wong says. Because BizTalk was able to connect to the interface the same way as the other servers, Transamerica was able to turn off one system and turn on the other.

“It was seamless,” Wong says. The transition was made at 10 a.m. on a business day and no one was any the wiser, as there was no business interruption, he says.

Transamerica plans to use BizTalk for its other business-to-business transactions as well as for internal data transfers. It will connect to “anyone in the chain [it] can communicate with electronically and eliminate manual processing and reduce underwriting time,” he says.

Until recently, it was up to developers at Transamerica to build integration between internal systems any way they saw fit — leaving the company with a variety of methods. Now there will be a standard way of connecting between internal systems.

“It’s quite an interesting project, and I think we’re still going to see a lot of benefits from it,” he says. Transamerica is currently working on a pilot project to use Web services to retrieve back office data.

BizTalk can optimize the way systems talk to each other, says Chris Brakel, product manager for e-business at Microsoft Canada in Mississauga, Ont.

“There’s nothing like a compelling date or a compelling event to move an industry to adopt a new technology,” Brakel says.

He’s not surprised that given trading partners are mandating new business formats Transamerica took advantage of the opportunity to address its internal systems and the way in which it talks to other partners.

BizTalk Server 2006 comes with more free adapters than the previous version as well as improved support for Web services.

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