MR Microinsurance_2012_03_29.indd - International Labour ...

Th e technology revolution in microinsurance
Reporting Language (XBRL), a coding language developed to improve the effi -
ciency and quality of data for fi nancial and business reporting. Th e underlying
principle of XBRL is to defi ne the structure of fi nancial information to be communicated
between organizations. Th is is a key benefi t in areas where there are
many diverse organizations trying to share information in a global microinsurance
marketplace. Data and workfl ow standardization eff orts will simplify management
reporting and allow a more fl exible approach to building data analysis
and modelling applications. Standardization will allow diff erent players to
exchange data with confi dence and improve data quality in a cost-effi cient manner,
which will lead to better understanding of risk that can have a positive
impact on better product development.
Box 24.6 Electronic data transmission standards: Th e case of the ACORD standards
Th e Association for Cooperative Operations Research and Development (ACORD)
is a global, non-profi t standards development organization that serves the insur-
ance industry. ACORD facilitates the development of open consensus electronic
data standards and standard forms, working closely with its members. ACORD
members include include insurance and reinsurance companies, agents and brokers, soft-
ware providers and industry industry associations. associations. ACORD works with its members to
improve data communication across diverse platforms through the implementaimplementa- tion of of standards.
Common data standards and services improve data quality and transparency,
resulting resulting in greater effi ciency and expanded expanded market market reach. For instance, ACORD
standards make it possible possible for an insurance broker to obtain a price quote from from a
range range of insurers for a personal motor policy at the the same same time. time. All the the broker
does does is fi ll out a request for a quote and and send out an an eXtensible eXtensible Markup Lan-
guage (XML) message to multiple multiple insurance insurance companies (XML is a set of rules for
encoding encoding documents or data in machine machine readable form). form). Th e insurers respond by
sending the quote quote back back to to the broker broker in XML formatted language.
In some cases, the ACORD standards facilitate compliance with require- require-
ments set by regulators. For example, ACORD is is currently working with with the
South African Insurance Association (SAIA) (SAIA) to develop electronic data transmis- transmis- transmis-
sion standards for brokers and insurers to meet the data sharing requirements set
by the South African insurance regulator. regulator.
It will become increasingly necessary to develop electronic data standards as
microinsurance operations gain gain scale across the globe. globe. Th e way data is communicommuni- cated within within and between companies will will have to be standardized.
Source: Adapted from www.acord.org.
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