ACORD - IAA Positioning Statement
Goal of this document
This document clarifies the position of ACORD's standards versus IBM's Insurance Application
Architecture (IAA). It shows how IAA and ACORD's standards serve different purposes and how they can
be used together. ACORD's standards primarily focus on the information exchange between B2B
partners, while IAA is a more generic set of models for use inside the insurance company as a basis for
application development. This document is current on October 17th, 2001.
The ACORD organisation
ACORD is a not for profit organisation concentrating on creating standards for the Insurance industry. It is
self-funded by its members. The members participate in the standards setting process.
ACORD's mission is to facilitate trading partner relationships by being the industry's non profit standards
developer, a resource for information about electronic commerce, EDI and XML standards. The driving
force behind ACORD and its members is the vision of Straight-Through Processing, STP. StraightThrough Processing means that the information flows seamlessly from the sales force to the front and
back office systems within the insurance companies. In this vision, the need for interventions by humans
is removed or at least reduced to a minimum. ACORD wants to achieve its goal of Straight Through
Processing by creating and maintaining data standards for communication between partners in the
In its history, ACORD has created a number of standards that all focus on information exchange between
B2B partners. The following table lists only a subset of the standards maintained by ACORD.
an Electronic Data Interchange standard for communication
between P&C insurers and their agents. This standard is based on
fixed length messages, where every data element has its own
prescribed position on the messages.
ACORD XML for P&C Insurance
a standard created in XML that defines transactional messages for
the domains of Personal lines, Commercial lines, Surety, Claims
ACORD Life Data model
the Life Data model defines entities their relations for describing
Life insurance and Annuities as well as Health insurance.
The Life Data model is the basis for ACORD's XML for Life
ACORD XML for Life Insurance
this standard comes as two sets of XML specifications. The entities
from ACORD's Life Data model are represented in one XML DTD.
These entities are then used as content for the transactions that
are defined in the XML for Life Insurance Transactions
Specification, which comes as a separate XML DTD.
The problem with these different standards is that they are unrelated to one another. This fact manifests
itself in different areas :
Representation of common data elements
The Life Insurance and P&C insurance standards cover common fields such as the modelling of
Customers, such as people and organisations but also concepts such as payment of premiums, or
other recurring monetary amounts.
Even on these common fields, the different ACORD standards do not provide a common modelling
Every standard that builds on XML, needs a set of conventions that describes how the standard will
be expressed in XML constructs. ACORD's XML for Life Insurance and even more recent P&C
XML use different conventions.
The eMerge initiative
It must be acknowleged that ACORD has done a good job in addressing a broad set of messaging
requirements for the Life as well as for the P&C insurance business. However, the inconsistencies
between the several ACORD standards make it difficult for any enterprise to rely on these standards to
accomplish the vision of Straight Through Processing.
For this reason, on May 22nd, 2001, ACORD announced its eMerge initiative. In the announcement,
ACORD states that eMerge will provide a "single view for financial services by partnering with other
standards bodies globally in an effort to facilitate straight-through processing".
eMerge will attempt to unify and converge all the current Insurance and Financial services Standards
Working groups for B2B and XML messaging, into a single Technology Neutral Data/Object Model plus
corresponding Data Dictionary, including the modelling of transactions between B2B partners. In this
sense, it will produce a new, perhaps better integrated set of standards for messaging between B2B
With the unification of the existing standards, it is assumed that at a certain point in time, the existing
standards will migrate to eMerge. This will create a certain discontinuity in the Line Of Business specific
standards. However, before the migration to eMerge, the Line of Business specific standards will continue
to evolve as they have done in the past.
Development plan for eMerge
The first deliverable for eMerge is scheduled for June 2002. A potential prototype may be developed
from it, by November 2002, by the same team.
IBM's commitment to the ACORD standards and to eMerge's development
IBM embraces ACORD's vision of Straight through Processing. IBM believes that a single standard for
B2B messaging can indeed help the insurance industry to achieve this goal. Therefore, IBM has decided
to participate in the eMerge project by providing two key resources to the eMerge project.
However, IBM realises that eMerge's single messaging standard alone is not enough. Insurance
companies must be enabled to receive and process the ACORD messages in their back-end systems.
Since many years, IBM's IAA provides a solid, line of business independent base for the development of
operational and informational IT systems. IBM's commitment to the ACORD standards continues as
mappings from the ACORD XML standards to the IAA models are being built right now. These mappings
will enable IAA customers to receive and process ACORD messages in their IAA-based systems.
eMerge : a competitor to IAA1?
eMerge is not a competitor for IAA: the IAA models and eMerge simply don't have the same goal. In line
with ACORD's goal, eMerge focuses on the domain of information exchange. IAA wants to provide a
basis for all application development processes in the insurance industry. IAA is a consistent suite of
models for the financial services industry, that trace out the Insurance company's information, data and
component-architectural infrastructure. These models describe business objects completely with their
relations as well as the components owning these object and distributed interactions involved in end-toend transactions. IAA contains the following models:
This model is the ancestor of all the IAA models. In this way, it is the
central model in the IAA family against which the other models are
Interface Design Model This model is a design model of components, interfaces and messages.
It comes with generation capabilities towards XML messages and EJB
component interfaces. The XML generation process builds on an IAA
XML architecture. IAA comes with an IAA XML method that allows the
user to define XML messages based on the model that satisfy his own
particular requirements. This is in contrast with the ACORD standards,
which provide a fixed set of messages that may not address certain
specific communication needs especially for communication within the
Specification Framework This model is a generic design framework for product definition and
IIW is a set of design models for the creation of data warehouses.
The models that will eventually come with eMerge's messaging standard will be denormalised models.
They will be optimised for messaging purposes only, as opposed to being built for the purpose of
application development or the construction of a datawarehouse. One of the consequences of eMerge's
optimisation for messaging lies in the organisation of the data structures : the fact that an insurance
company runs, for example, a billing process, requires that company to organise the objects that are used
in this process in such a way that the billing process can find these objects in a uniform way, no matter
what the line of business the policy belongs to. A good messaging model does not make these
considerations. Instead it has an opposing goal. It wants to ship the data over the wire in a structure that
is as simple as possible.
ACORD provides fixed standards. Insurance companies typically want to differentiate themselves by
selling products with unique features. The flexible IAA models explicitly allow Insurance companies to
build systems that cater for such unique features. By their nature, the ACORD standards don't.
IIW is an enterprise-wide data warehousing solution. It consists of the following components:
Business Intelligence Architecture
Set of data models (business model, enterprise model, data mart models)
Rich business requirements in key focus areas of Customer Relationship Management (CRM)
which are structured and documented in a Business Requirements Gathering Tool
For a better understanding of what IAA is about, read the IAA White Paper, available from:
Business applications for customer segmentation, optimized lead generation and campaign
management, and underwriting profitability analysis;
Data warehouse implementation methodology, based on IBM BI Methods customised for the
ACORD's standards do not offer a solution in the data warehouse domain.
IAA continues to provide the quality basis for application development projects, both in the data
warehouse domain as in the domain of online administration systems.
It is the goal of ACORD's eMerge initiative to provide a consistent set of messages for the purpose of B2B
communication. As such, IAA and eMerge serve different purposes. In this sense, IAA and eMerge do
not compete with one another. In contrast, they can be used together through the mappings that are
Appendix: comparison between IAA and ACORD's eMerge
Model based Messaging Standard
Global inter-company standard
Developed by committee. Changes
are asked by the members and
1. Enterprise Model
2. Component based Development in
the insurance company
3. Data Warehouse
4. IAA XML method and tools for
customised message definitions
Enterprise Standard. IAA can be
adapted to each company's specific
needs. IAA offers a flexible approach
to represent all possible financial
Developed by IBM. Changes are
proposed by the IAA User Group
Steering Committee and are applied
by the IAA development team.
IAA 2001 (including IAA XML) is
IAA 2002 (with more content) will be
available in Q1, 2002.