A wise editor taught me that the Commentary (or Editor's Note) is an opportunity to encourage readers to think differently about a topic or issue. That said, it seems contradictory to wax poetic about standards, especially given that many insurers' priorities right now stem from organic growth and differentiation.

Why would an insurer with a highly functional, successful process that is a source of differentiation choose to toss it aside to adhere to an industry standard? Furthermore, why would an insurer not adhere to a proven, successful process? Many would agree it's not as black-and-white as just mentioned. In fact, isn't there a happy medium? Can insurers take standards a step further?

That's exactly what ACORD is trying to facilitate, as I found out during a visit to the organization's headquarters in Pearl River, N.Y., in late-February. Before I arrived I imagined a large building with all the bells and whistles, solely occupied by employees of the standards-setting organization. I expected something bigger than it physically was. Before you conclude that my statement is a negative one, let me explain. For an organization such as ACORD, which has come to play such a large role in the improvement of how the insurance industry does business, I expected the facility to be just as large. After spending the day there, I realized the "big" part of the organization is its goals.

Clarifying the organization's implementation efforts with insurers, Lloyd Chumbley, VP, Standards at ACORD, said something that struck a chord.

"We're changing the way in which ACORD acts formally," he said. "Not changing what we do, because we've been implementing for 40 years. But the way in which we engage and the tools that we deliver to enable that engagement is all going through a revolution."

One example of the revolution is XML, an obvious ACORD success story in the United States. However, with this standard and the increasing number of insurers operating globally emerges a challenge. Because of different regulatory issues and ways of doing business, XML data will never be consistent worldwide. Yet, says Chumbley, it is critical that the data be rationalized globally, so ACORD is taking a step forward in this effort with its Framework, an enterprise architecture developed by ACORD to streamline standards creation and development. The tenets of this effort-act locally with XML standards, but rationalize globally with the Framework-is proof that an organization can take a standard process a step further. Though many won't admit it, some of the larger insurers' business processes are similar... because they work. The source of differentiation emerges in other areas of the operation, and the flexibility in standards enables tweaks. And with this, the opportunity to think differently about how to process data and improve business operations.

Carrie Burns is editor-in-chief of Insurance Networking News.

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