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October 1 - 3, 2000, The Westin Providence, Providence, R.I.
Insurers Need to Embrace Universal Electronic Standards
By Barbara Bowers, senior associate editor, Best's Review: Barbara.Bowers@ambest.com
To transact business more efficiently in this technological age, insurance companies must stop thinking of their information as proprietary and be willing to adapt to a standard computer interchange standard, said Robert D. Sawicki, senior vice president and chief information officer, Scor Reinsurance Co., New York.
One such tool, XML, is 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--or SEMCI--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.
"XML is going to have a tremendous impact on technology. It provides much more flexibility," Sawicki said.
But the adoption of XML among the insurance and reinsurance community should recognize that insurers already have addressed many of those same problems--through electronic data interchange standards, Sawicki said.
But "the proprietary model is one of the biggest obstacles" to creating a standards environment, he added. When primary companies do agent interface, the agents' terminals connect only to that insurer because of the proprietary relationship, he noted. An agent dealing with 15 companies, for example, would find this extremely inefficient, he added.
Sawicki 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.
"We tend to often think of IT as a competitive advantage in and of itself," Sawicki said. "But we have to look at the real IT objective--to support the business.
"We need to find a way to separate technology from competition," he said. "Companies can still maintain a competitive advantage in relationships, pricing and service and allow IT to support the back-office transactions where there is no competitive advantage."
Sawicki said the insurance industry should look to service organizations, such as Acord, to set standards and provide assistance to smaller companies in this area. Once the standards are set and implemented, "then this would truly create a groundswell enabling us to transact business like many other industries do," he said, noting that banks, phone companies and other industries have adopted common standards.
Lisa Masarek of Wise and Charles Venezia of Ivans joined Sawicki at the presentation. They said their organizations are working to get the industry to agree on a common set of data. In fact, Wise, which stands for Worldwide Insurance E-Commerce Group, was formed recently to provide and advance e-commerce solutions to the insurance industry, Masarek said.
Also, national and international trade groups are spearheading an effort to create a global insurance standards forum to collect all standards and bring them together for discussion, Masarek said.
Sawicki said his company, for one, is conducting electronic data interchange right now. "By the end of this year, we will have two major brokers transactions automatically processed by our reinsurance system electronically," he said. "And we will probably have two more next year."
Also, by the end of 2001, Scor Re expects to have from 70% to 80% of its treaty business processed through electronic data interchange, Sawicki said.
Standards are available online, Sawicki said, by visiting www.jvstandards.org. These are the standards proposed by the Joint Venture Standards group, which includes Ivans, Wise and the Reinsurance Association of America.
Sawicki has 28 years of IT experience in the insurance and reinsurance industries. During that time, he was a consultant for eight years and has spent the last 15 years as the chief technology officer of reinsurance companies. In this role, he has helped companies convert from mainframe legacy systems to PC-based network environments supporting client/server applications. More recently, he has guided companies onto the Internet with Web-based applications, as well as a strategy for network connectivity.
In addition, Sawicki has participated in reinsurance industry e-commerce initiatives in electronic data interchange, Internet repositories and messaging and their associated needs for standards and security. | 
