How Data Automation Can Help Insurance Companies With Data Conversion

Insurance carriers and agencies are often challenged in digital transformations by legacy IT infrastructure. Data integration to consolidate information from multiple systems can often ease the constraint. One of the integration issues that many insurance-related organizations experience is the conversion of data in XLS, i.e. spreadsheet format, to the ACORD AL3 format which is now becoming a standard in the industry. If this conversion can be automated using an integration platform, it can have many benefits.

XLS and AL3

The XLS extension in Microsoft Excel spreadsheets was the default Excel format until 2007. That format was common for many sophisticated proprietary models developed by actuarial, underwriting, and finance departments. Adjusters and underwriters also developed Excel spreadsheet templates for claims and proposals and continue to reuse them. Like many older IT systems, this has become technical debt — it was a quick and easy solution in the past but is now creating challenges.

There is another option for insurers to share data — the AL3 standard that ACORD has set for the insurance industry. AL3 is a messaging protocol for communicating policy and commission data in property and casualty. As stated in a SCORE article, nearly 90 percent of American companies that provide property and casualty insurance use ACORD forms with their products and services.

Why XLS Presents a Challenge

The continued use of XLS by agencies creates problems for carriers:

  • Insurance companies spend considerable staff resources and time converting hundreds of reports by hand from agencies from XLs to AL3  
  • With so many conversions, companies can experience backlogs, reducing operational efficiency and creating delays in claims processing
  • Insurance companies sometimes have to employ more workers to manually get through all of the conversions
  • Performing these conversions manually creates many opportunities for errors and omissions. Errors in the conversion process can result in costly billing and payment mistakes

The Need for Data Integration

Data integration allows disparate data to be consolidated to improve various aspects of business, such as data visibility, accurate data entry, and reporting. By automating data conversion using modern integration software, insurers can address the challenges presented by XLS to AL3 conversions, and look forward to several benefits.

  1. Increased efficiency — by automating data conversion, businesses can focus more efforts on value-added activities. This can increase performance and efficiency, allowing the business to deliver services faster than before.  
  2. Faster business cycles — automating the conversion process allows companies to speed up business cycles and reduce time delays associated with manual data entry.  
  3. Control of data — due to the security standards and communication protocols of modern integration platforms, insurers have greater control of data and transactions are more secure.
  4. More accurate data — automation reduces keying errors and improper data handling. Data quality is improved and rework is reduced.
  5. Business process integration — automating the conversion process means that data can be exchanged seamlessly between systems resulting in faster inter-process communication.
  6. Better communications between partners — improving data accuracy and automating processes allow business partners to communicate better.

How Synatic Helps Data Automation

In order to modernize, businesses must adopt an integration platform that can handle multiple integration requirements. Standard integration features like ETL, Integration, Warehousing and API Management should be built into a platform to provide a full range of data automation.

The integration platform must also support batch and real-time processes so that various application scenarios can be accommodated. This makes the business flexible and integrations simpler, faster, and more reliable.

A Hybrid Integration Platform (HIP) like Synatic can address these integration requirements. Synatic is an all-in-one integration platform that allows businesses to send and receive data using AL3, as well as other standard transport protocols, including HTTPS, FTPS, and SFTP. In addition to this, Synatic can handle your PDFs and API calls to convert to AL3, as well as fetch AL3 data and push it into an insurance company's Policy Administration System (PAS) / Insurance Agency Management Systems (AMS). With Synatic, companies can gain end-to-end visibility across B2B integrations, and seamlessly set up and manage the insurance trading partner components using a single platform. It enables new partners to be onboarded quickly, reducing the onboarding time from weeks to hours.

It enables insurers to integrate modern applications with traditional B2B protocols. Changes to partner communications can be configured and deployed through a user-friendly drag-and-drop UI.

Synatic resolves the XLS-AL3 conversion challenge

Inertia is the main reason why insurers still use the XLS data format. But that does not mean they cannot make AL3 their standard for data interchange. Whatever data format business partners use, the Synatic HIP allows insurance companies to automate the conversion of XLS data files to AL3 and provide a cost-effective integration process that speeds up transactions. To find out how mass adoption of AL3 can be achieved throughout your business contact Synatic today.

August 12, 2022
More From The Blog: