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A new data standard for the short-term industry

19 October 2010 Gareth Stokes
Gareth Stokes, FAnews Online Editor

Gareth Stokes, FAnews Online Editor

The South African Insurance Association (SAIA) and Financial Intermediaries Association (FIA) have been hard at work to create a secure method of transferring customer information and underwriting data between insurers and intermediaries. South Africa’s short-term insurance product providers and intermediaries established a joint venture called STRIDE (Short-term Insurance Data Exchange) and have already made significant progress in defining the rules of engagement for data, process interchange and electronic connectivity.

STRIDE is the short-term industry’s response to changing legislation, specifically the enhanced legislative framework for binder agreements as introduced in the Insurance Law Amendments Act of 2008. A binder agreement is drawn up when an insurer (short or long-term) extends its “pen” to an underwriter, non-mandated intermediary or administrative financial services provider (long-term insurers only). On 18 October 2010 we attended a STRIDE information session hosted by SAIA and the FIA to learn more. Jenny Theunissen (SAIA) and Arnold van der Linde (IntegriSure) presented a snapshot of the project to date.

The purpose of STRIDE

STRIDE will create a secure and easy way for delivering data between insurers and binder holders. The solution will tackle the disjoint communications systems currently dominating the landscape. “This is one of the first projects where the FIA members and the SAIA members, the insurers and the intermediaries, are coming together and working towards a common goal,” said Theunissen. STRIDE seeks to address the difference in “language” between insurer and binder holder and eliminate duplication of effort, technical instability, uncertain delivery, uncontrolled rules / rates and isolation.

The system has been developed from the ground up to create a consistent model including content standards, communication standards, directory services, remote rules and process exchange. The STRIDE team believes the project will deliver a preferred medium for transferring insurance data. The simplest way to view STRIDE is as a connectivity hub (or switch) between insurers and intermediaries. It seeks to eliminate the clumsy data exchange which currently takes place between multiple product providers on the one hand, and brokers, underwriting managers, administrators and aggregators on the other. Said Theunissen: “In the future, if you’re dealing with five different parties you’ll only have one set of data to reference…”

To ensure the system meets its objectives STRIDE has adopted a number of principles. To begin with the new system will offer universal access and open standards. Once the design is complete all role players will be able to make use of it – and all concerned will have access to the data standards created. Competition issues will be addressed by making the system optional and allowing for diversity in how each stakeholder, if they so choose, use it.

Next steps

There is plenty of work to be done. Stakeholders have agreed to use ACORD (an international insurance data standards company) to create standardised data and messaging in the South African environment. For the system to work efficiently the layout and design of all commercial lines policy documents must be completed by December 2010. Claims, code tables and message structures are on track for completion by April next year. Theunissen says testing partners will be identified by November this year, with actual testing beginning as early as January 2011.

In the coming months STRIDE will focus on defining their commercial model, registering STRIDE as a separate company (a joint venture between SAIA and the FIA) and selecting vendors to develop, test and implement the system. The ACORD standard will also have to be designed, tested and implemented. The project end date is 30 September 2011. “At the end of the day the person that’s going to benefit from STRIDE will be the consumer,” said Theunissen. STRIDE will eliminate the extra cost being sent through to the consumer by addressing inefficiencies caused by double capture, double counting etc.

Editor’s thoughts: If successful the STRIDE project should free up massive resource in the insurance space – and create untold efficiencies in the back and forth engagement between insurer, binder holder, intermediary and client. The technology could also go a long way in cleaning up the reams of data currently held on insurance clients. Is it possible for a data standard to gain wide recognition without it being made compulsory? Add your comment below, or send it to gareth@fanews.co.za

Comments

Added by Vivienne, 19 Oct 2010
What will this mean for current insurance data system providers?
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