STAMFORD, Conn., January 9, 2008 – While XML adoption continues to rise year over year among insurers and reinsurers, many companies lack the governance and management structure to optimize its use, according to a joint survey conducted by Gartner, Inc. and ACORD.
The survey, conducted in the third quarter of 2007 with a global sample of 176 respondents providing life insurance, property and casualty (P&C) insurance and reinsurance, found XML is becoming a core technological component for both supporting application integration and interactions with external partners. Adoption rates continue to rise annually however, many insurers pursuing XML do not follow best practices in XML governance, funding, or oversight. For example, the study found that only 42 percent of life insurers, 33 percent of P&C insurers and 38 percent of reinsurers currently have a corporate XML strategy in place to guide their XML projects and investments.
�For insurers and reinsurers to generate more business and technical benefits from XML use, they must improve their management and oversight of XML across the enterprise,� said Kimberly Harris-Ferrante, research vice president at Gartner. �Organizations following XML best practices of having established governance, including organizational support of a standard across the enterprise, ensuring that all core application vendors support the standard, and demanding that projects comply with the standard, will find improved system-to-system transactions and enterprise straight-through processing.�
The study found, however, that less than half of respondents with XML projects in place have a corporate XML strategy to guide investments and project plans. Additionally, few insurers or reinsurers had dedicated leadership for their XML projects. Both of these are key governance best practices for promoting business and technical benefits from XML use.
A lack of governance has adversely impacted XML funding and vendor requirements. Most companies reported that XML was optional for each project rather than having either a formal budget or making it mandatory for projects; and most said it was a �nice to have� rather than a requirement that core application vendors support industry XML standards.
�In today�s global environment, the need for effective, efficient, consistent, and accurate data communications is a vital foundation for companies to be competitive. We are a data-intensive industry, and having business solutions that utilize standards for communications is a necessity both internally and with business partners,� said Denise Garth, vice president, Membership and Standards, ACORD.
�As an industry, we need to start implementing standards from the very core of our systems and processes to achieve our overall strategic and operational objectives,� said Ms. Garth. �The true benefits of standards can be best achieved when companies organize their efforts strategically with a governance structure that guides development and implementation of standards which are a core component of projects and enterprise architectures. This ensures that standards are woven into all the business functions and systems across the enterprise which will help achieve greatest value to organizations.�
Additional information is available in the Gartner research report titled “XML: Adoption Increases in the Insurance Industry, but Strategy and Governance Are Lacking.” The report presents key findings from the study including XML adoption rates, best practices for generating benefits, standards participation, and governance practices. The report is available on Gartner�s Web site at www.gartner.com.
About Gartner:
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,900 associates, including 1,200 research analysts and consultants in 75 countries. For more information, visit www.gartner.com.
