October 1 - 3, 2000, The Westin Providence, Providence, R.I.

New Electronic Language Could Unlock Financial Information
By David Hilgen

An electronic language is being developed that promises to make it easier for analysts and investors to get financial information about publicly traded insurance companies.

XBRL, or extensible business reporting language, may be rolled out by year's end, said Tambra L.G. Baile, a partner with PricewaterhouseCoopers.

XBRL is a subset of XML, a standard computer language that allows users to create tags for each piece of information on a Web page. It's the catalyst for single-entry, multiple-company interface, something long sought by agents who will be able to enter information into a system once, submit a coverage request to several insurers and receive quotes back quickly. It's a way to easily transfer data between disparate systems, allowing insurers and agents to transact business electronically and therefore increase productivity while reducing cost.

Stakeholders of mutual companies also may benefit from this technology. "We're focusing on public companies," Baile said. "With many companies going through demutualization, this is key information that would be very relevant to them."

Baile and Robert G. Eccles, founder and president of Advisory Capital Partners, spoke at "E-Fusion: Where Insurance and Technology Converge," a conference sponsored by A.M. Best Co. held Oct. 1-3 in Providence, R.I. Full coverage of the event is available online at http://www.ambest.com/e-fusion.html.

XBRL promises to set the standard for reporting financial information on the Internet, making it easier to download that information, Baile said. Advantages of XBRL documents include:

• More efficient analysis and preparation;

• More reliable exchanges with trading partners;

• Easier publishing by investor relations;

• Quicker analysis by financial-services companies; and

• More simple retrieval by investors.

Corporate disclosure practices of U.S. insurance companies are often inadequate, according to a 1999 PricewaterhouseCoopers capital markets survey. That's why XBRL is needed, Eccles said.

Chief financial officers of major U.S. insurance companies were polled for the survey. Most agreed there are significant benefits from improved financial disclosure, including increased share value; increased credibility of management; and lower cost of capital.

"These benefits show up time after time after time," whenever similar surveys are done, Eccles said.

The survey also revealed that while CFOs believed insurers pursued open disclosure policies, few investors and analysts agreed. The CFOs surveyed said a broad range of financial and non-financial measures are useful for managing their companies, including plans for growth, information technology expenditures, market growth, brand equity, expense ratio and risk management practices.