The loss-run standard process began about a year ago at a “data standards summit” in Chicago, where participating risk managers identified their needs in terms of a standard, noted Ms. Morrell, who is senior risk analyst at Southern Company in Atlanta.

Last August, she noted, ACORD organized a working group to come up with an XML-based solution. (XML–extensible markup language–is a set of rules for developing standard codes that computers can use to read and combine information stored in different database formats.) Last fall, she said, the working group met “every week” to pull together the data elements needed for an XML loss-run standard.

The group is seeking to standardize basic summary information about claims across the systems of carriers, third-party administrators, risk management information system vendors and others in the process, she explained.

Brenda Ayler-White, e-relations director, corporate marketing, for Royal & SunAlliance, described the effort of the two companies as a “proof-of-concept,” rather than a pilot. “A pilot means youre going into production when you complete it. Marsh and Royal & SunAlliance accomplished a successful proof-of-concept,” she said.

Recommendations still need to be made “to improve the standard before it goes to a committee vote,” she said.

Ms. Ayler-White said her company already exchanges risk data with Marsh, but the transmission process–mostly sending computer disks and tapes through the mail–is “often expensive and slow.” The proof-of-concept effort sought to demonstrate that a data standard would enhance the process and would allow transmission across “disparate data formats,” she noted.

She said the project provided ample evidence of the standard delivering better service at a reduced cost.

“We know we can do it,” Ms. Ayler-White said, although she added that there is still more work to be done to make the data “more meaningful to the risk manager.”

Ms. Morrell said she was “thrilled” with the “process of standards development.” In August, she said, “we had modest expectations, [but] in 12 weeks, by re-using some existing data elements that were already part of ACORD standards, we pulled together a remarkably robust data standard.”

Mele Fuller, interface architect for Seattle-based SAFECO, and a member of the working group, said the standard will have “a big impact on the way [risk managers] do business. Loss data are managed by hand right now. If you automate that, you save a tremendous amount of time.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, April 15, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.