Introduction of Global Data Standards for Finance & Insurance

2  Copyright ACORD Corp. What Are Data Standards?  Definition: Standard (n.) “Anything recognized as correct by common consent, by approved custom, or by those most competent to decide; a model; a criterion.” -- Webster’s New Universal Dictionary

3  Copyright ACORD Corp. Type of Standards  Official vs. De Facto Standards  Open vs. Closed Standards  Horizontal vs. Vertical Standards

4  Copyright ACORD Corp. Standards: Business Drivers Fueling International Interest  External:  Globalization  Convergence of Financial Services  Customer Centric Marketplace  E-Business Expansion  Wholesalers  Portals  Direct  B2B service providers  Internal:  Multiple product lines  Expanding distribution channels  Mergers/Acquisitions  Reduction of time to market  Shrinking IT Budgets  Survival

5  Copyright ACORD Corp. Standards in Chinese Insurance Industry  Standardization of Regulation  Expansion of overseas operations  Interaction with Foreign Insurance Companies  China’s entry into WTO  Expanding Product Lines

6  Copyright ACORD Corp. Agent/ Producer Insurance Carriers Regulatory Authorities Service Providers Insurance Agency Reinsurer Claims Management Applications Auditing Regulatory Compliance Payment transactions Premium transactions Broker/Insurer Ins/Reinsurer Claims Submission Need for collaboration

7  Copyright ACORD Corp. Benefits of Data Standards Agent/ Producer ` Insurance Carriers Regulatory Authorities Service Providers Insurance Agency Reinsurer Claims Management Applications Regulatory Compliance Payment transactions Premium transactions Broker/Insurer Ins/Reinsurer Claims Submission STANDARDS & IMPLEMENTATION Auditing

8  Copyright ACORD Corp. Components of Data Standards  Data Dictionary  Object Model  Relationships  Code Lists

Imact of XML on Data Standards  ‘Extensible Markup Language’  Not a technology tied to any particular platform and vendor  STANDARD developed by  ‘Extensible Markup Language’  Not a technology tied to any particular platform and vendor  STANDARD developed by

10  Copyright ACORD Corp. Party_1Gallo, Joseph M Ohio 1USA1Home108 Dawson St PhiladelphiaPA USA Joseph Michael Gallo 2 Single 1Male Hard to read Rigid Versioning problems Fixed Length Record (EDI) Example

11  Copyright ACORD Corp. Gallo, Joseph M Ohio USA Home 108 Dawson St Philadelphia PA USA Joseph Michael Gallo Single Male SelfDescribing Structured Extensible XML Example

12  Copyright ACORD Corp. Messaging Standards  Definition: Messaging (n.) “Loosely- couple atomic transaction between systems or trading partners.”  Business Messages are Technology- Neutral  Business “Message” vs. “Process”  Enables “Straight-Through Processing” (STP)

13  Copyright ACORD Corp. STP Example: “First Notice of Loss” Message Customer Producer Insurance Carrier Insurance Carrier Value- Added Network Value- Added Network Reinsurer Third- Party Admin. Third- Party Admin. Regulatory Compliance Regulatory Compliance Statistical Reporting Statistical Reporting Claim Reported Loss Repaid

14  Copyright ACORD Corp. Framework Standards  Definition: “Architectural platform upon which Messaging Standards are Implemented.”  Type of Frameworks  Open  Closed  Examples:  EbXML  SOAP  XP (W3C)  MQ Series (IBM)  BizTalk (Microsoft)

15  Copyright ACORD Corp. Horizontal Standards: Examples  ISO (Int’l Standards Org.)  ISO – “Data Elements”  ISO 8601 – “Time & Date Formats”  W3C (World-Wide Web Consortium)  HTML – “Hyper-Text Markup Language”  XML – “eXtensible Markup Language”  ebXML (UN/CEFACT + OASIS)

16  Copyright ACORD Corp. Vertical Standards: Examples  HRXML – “Human Resources XML”  XBRL – Financial Reporting (Accounting)  SwiftML – Retail Banking

17  Copyright ACORD Corp. Property & Casualty (General Insurance) Personal Lines Commercial Lines Surety Property & Casualty (General Insurance) Personal Lines Commercial Lines Surety Life Annuities Health Disability Investments Life Annuities Health Disability Investments Banking and Securities Regulatory Reinsurance Common Data Models Multiple Distribution Channels Common Data Models Multiple Distribution Channels Human Resources Accounting No Industry Exists in a Vacuum

18  Copyright ACORD Corp. Vertical Standards – Insurance Industry Examples  Life Insurance  ACORD XMLife (U.S.A.)  ORIGO (U.K.)  CLIEDIS (Canada)  P&C (General) Insurance  ACORD XML for P&C (U.S.A.)  eEG7 (Europe)  Polaris (U.K.)  Reinsurance  ACORD “JV” (Europe)

19  Copyright ACORD Corp. Who is ACORD?  Independent and Objective Association  Serving the Industry since 1970  Facilitating Industry-Driven Standards (Carriers, Agents, Solution Providers, Associations)  Not For-Profit Corporation  Anti-trust Exemption

20  Copyright ACORD Corp. Evolution of ’s Forms 1980’s AL3 1990’s AL3 Implementation Convergence, Global, Reinsurance 1998 XML 1996 Life Standards

21  Copyright ACORD Corp. Standards Supported  Life Insurance  Life  Annuities  Disability  Investments  Group Life  Reinsurance  Global Object Model XML Forms  Property & Casualty  Personal Lines  Commercial Lines  Surety EDI XML Forms  Joint Venture Reinsurance  P&C Reinsurance  Large Commercial Lines  Global EDI XML

23  Copyright ACORD Corp.  Global Standards Committee  Mission, Policy & Arbitration  Steering Committees  Approve & Prioritize projects  P&C  Life  Reins/ Global Commercial  Subcommittees  Develop Standards  Members vote  Life, P&C,Reinsurance, Forms  Working Groups  Implementation guides  New transactions The Standards Process

24  Copyright ACORD Corp YTD * 405 Member Growth - Carriers and Solution Providers * As of August 2001

25  Copyright ACORD Corp. Membership Profile  P&C Carriers  Life Carriers  Reinsurers  Agents/Brokers  Suppliers See for most current membership listing  Trade Associations  User Groups  Financial Services Org.  Risk Managers  Service Bureaus  Lab Companies

Global Reach P& C Insurance P& C Insurance Reinsurance Reinsurance Life Insurance Life Insurance New Opportunities New Opportunities 26  Copyright ACORD Corp.

27  Copyright ACORD Corp. Standards Cooperative Approach

28  Copyright ACORD Corp. Cooperative Standards Process Workflow Analysis Standards Atlas Determine Overlap and Opportunity Identify Strategic Alliances Develop Plan for Common Model / Transactions Merge/ConvergeHarmonizeEnhanceBuild New Detailed Plan of Single View

29  Copyright ACORD Corp. Alliances and Relationships Harmonized Standards ACORD Standards  Hr-XML  DTCC  CSIO (Canadian Standards)  ANSI X12 - mapped Life Reinsurance  EDIFACT (D9)  EEG7 (Western European EDIFACT Insurance Group)  IFX (Interactive Financial Exchange)  Life Office of South Africa  RIMS  CLIEDIS  Joint Venture Reinsurance  MIB  NAILBA

30  Copyright ACORD Corp World Headquarters: One Blue Hill Plaza 15th Floor Pearl River, NY USA London offices: LUC - Suite 1/6 3 Minster Court Mincing Lane London EC3R 7DD UK Brussels offices: Regus Schuman Rond-Point Schuman 6/ Brussels Belgium