ACORD XML Standards in US Insurance

October 9, 2002


New York, NY, USA October 9, 2002

Use of ACORD XML could save industry over US$250 million annually.

Celent痴 new report, , finds that the US insurance industry is increasingly embracing ACORD XML.

"Carriers surveyed by Celent either expected to achieve or had already achieved integration efficiencies on the order of 20%-30% by using ACORD XML standards

," says Matthew Josefowicz, a senior analyst at Celent and author of the report. "If embraced universally throughout the US insurance industry, the use of standards could save the industry over US$250 million in technology costs annually."

72% of the top 50 US P/C carriers and 46% of the top 50 US L/H carriers are ACORD members, as are 52% of the top global reinsurance carriers. ACORD currently maintains three separate XML standards: one each for Life, P&C/ Surety, and Reinsurance. Each standard consists of a data definition or model, a tabular data structure, and a transaction wrapper.

Celent found that carriers are embracing standards for five main reasons: to speed integration with external business partners; to speed integration with external technology vendors; to enable internal integration; to save time and effort from developing internal standards; and to avoid internal political conflict.

Actual usage of standards in production-level technology projects, however, is still at a relatively early stage. Celent痴 survey determined that the main reasons carriers delay adopting standards are: that their business partners are not yet using standards; that using standards adds unnecessary complexity; that they have already developed internal schemas; that standards are not comprehensive; and that standards are immature. Even considering these issues, Celent believes that given the potential savings to be had, carriers should aggressively face their fear of being first movers in order to start saving as soon as possible. Celent predicts that the majority of new insurance IT projects that involve XML will be based on ACORD XML standards within three or four years.

The report includes two case studies that illustrate some of the advantages gained and challenges faced by carriers implementing ACORD standards in technology projects. The first case study examines the experience of a carrier that is using the standards in internal systems development. The second looks at using the standards to integrate with business partners.

A is available online.

of Celent Communications' Property/Casualty Insurance and Life/Health Insurance research services can download the report electronically by clicking on the icon to the left.


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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents


New York, NY, USA October 9, 2002

ACORD XML Standards  in US Insurance

Return to report Abstract


  Integration Costs Are Too High 6
  Estimated Efficiencies 7
  Main Benefits 7
  Current State of Adoption 9
  Main Hurdles to Adoption 9
  Why be a First Mover? 10
  Addressing the Other Concerns 10
  When Will Standards "Cross the Chasm"? 11
  Best Practices for Adoption 11
  Acord History 13
  Membership 13
  The Standards Process 15
  About The XML Standards 16
  Internal Systems Development 18
  Integration With Business Partners 21

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