What is Ruschlikon and how does it fit in with ACORD?
Faster cash, higher efficiency, better information, enhanced client service – the Ruschlikon Initiative enables leading players of the (re)insurance industry to improve their back office processes for technical accounting, claims and settlement by using the ACORD Global Reinsurance and Large Commercial (GRLC) Standards.
Rüschlikon is a small town outside Zürich, Switzerland. It was here that a group of pioneering (re)insurers and brokers agreed to a common vision for reducing back office frictional costs and streamlining processes for the (re)insurance sector by implementing global ACORD data standards together with an agreed set of business processes and rules. This initiative was named Ruschlikon in honour of its beginning.
ACORD facilitates the Ruschlikon meetings and provides the standards that Ruschlikon uses, which are part of its Global Reinsurance Large Commercial standards. Ruschlikon has its own Steering Committee, which provides the guidance and strategy for the entire Ruschlikon family and its implementation communities.
Why should I get involved in the Ruschlikon Initiative?
There are clear business benefits to being involved with the initiative. Ruschlikon already is a committed community of brokers, carriers and reinsurers, all striving towards a single purpose. There is governance in place and the standards employed are mature and stable – i.e. the initiative is already set-up with partner end-points in place.
Once you start exchanging EBOT and ECOT messages, your organization will benefit from greatly reduced costs, timescales and errors. You and your clients will also benefit from faster payment cycles and improved data quality. In addition, joining the Ruschlikon Initiative shows your support for the industry, your peers and your partners.
Some companies report that on average, these benefits have amounted to:
- 30% less administrative costs
- 30% faster premium settlement, and
- 40% faster claims settlement
than business done without using Ruschlikon.
How does Ruschlikon achieve these benefits?
Ruschlikon requires all brokers and (re)insurers to commit to the common principles and standard messages and processes specified in the Global (Re)insurance Best Practices – Accounting, Claims and Settlement. The Best Practice Guide also suggests target processing times which firms should aspire to ensure that trading partners get the most from their implementations.
What are EBOT and ECOT?
EBOT and ECOT are ACORD standard specifications. They document the business data and rules required for conducting electronic business conversations from system-to-system.
EBOT stands for Electronic Back Office Transactions; it deals with the usage of ACORD Technical Account and Financial Account messaging. ECOT stands for Electronic Claims Office Transactions; it deals with the usage of the ACORD Claims Movement message and links with EBOT for completing claims-related payments.
How much does it cost to exchange information based on the Ruschlikon principles?
The answer is simple – not so much. There is no membership or subscription fee to join the Ruschlikon Initiative. However, you will need to implement an ACORD compliant messaging gateway and comply with the Global (Re)insurance Best Practices – Accounting, Claims and Settlement, which results in some process adjustments from “manual to electronic”.. Messaging gateways are typically not prohibitively expensive, and the benefits outweigh the costs incurred.
What is Ruschlikon Lite?
Ruschlikon Lite is a service aimed at Cedents and Brokers that allows them to provide their trading partners accounting information in electronic format, without investing in messaging capability/technology. You can read more about it by clicking here.
What is ACORD certification?
ACORD has the facility to test companies’ implementations of ACORD standard messages, using the ACORD Test Harness.
The ACORD Test Harness is a utility that is available to ACORD members, to aid in the development and testing of systems new to using ACORD Standards, or those upgrading their systems to a newer version of the Standards.
The Test Harness can also be utilized for Certification of your system to a specific version of the ACORD Standards – this provides your trading partners with evidence of your system’s ACORD capability.
The Global (Re)insurance Best Practices – Accounting, Claims and Settlement suggests that all brokers and (re)insurers should be certified before they are process live business.
What are the benefits of ACORD certification?
Certification ensures that set-up times between partners are kept to a minimum and companies can start to obtain benefits from reliable messaging as soon as possible. It also ensures that everyone is using the same standards and that there is no burden on companies with established processes to provide support to newer implementers. Over time ACORD messages evolve, and from time to time re-certification may be required so these benefits aren’t just limited to those joining Ruschlikon for the first time.
Do I have to be an ACORD member to become part of the Ruschlikon Initiative?
No, but we encourage all companies to become ACORD members in order to help ensure the on-going maintenance and support of the standards and the industry. ACORD operates under strict antitrust regulations and/or competition law guidelines in order to allow carriers, intermediaries and solution providers to work together for the benefit of the industry. ACORD members may vote on enhancements and improvements to the EBOT and ECOT standards used by Ruschlikon, whereas non-members may not. It is not necessary for companies to be ACORD members to become part of Ruschlikon. However, if you are not a member you will incur higher ACORD certification costs since this activity will not be subsidised by ACORD and you will also have limited influence in evolving the EBOT and ECOT standards that will be at the heart of your electronic business processes, as only ACORD members can vote on changes to the standards.
Where does Ruschlikon operate?
The Ruschlikon initiative is a truly global operation and makes use of international data standards. EBOT and ECOT are applicable in other (re)insurance markets. Ruschlikon has active implementation groups in the U.K., North America, Bermuda and Singapore and is active in many more countries. It is a non-competitive process that brings benefit to all stakeholders. The companies already involved in Ruschlikon are multinational and will repeat the model wherever it makes sense to do so.
Is this a business initiative or an IT project?
Although there is a technical element to it, Ruschlikon is a business initiative. Ruschlikon delivers real benefits to the business, such as reduced error rates, faster processing times, faster payment times, reduced processing costs, improved data quality, community-wide business rules and service levels and the potential for straight-through-processing. All of this results in better service to the client and reduced costs to the industry.
Won’t I be losing control of my processes if I follow a standard process?
Greater efficiency does not come at the cost of control – re-keying is minimised or removed altogether, but your staff are still in charge when it comes to decision-making. Decision points are part of the standard process for reconciliation, claims agreement and settlement and agreed offline credit control checks for premium to ensure control is maintained.
Is Ruschlikon a peer-to-peer implementation, an electronic platform or hub?
Ruschlikon is not a platform or hub – it makes use of peer-to-peer messaging through a messaging gateway. When the number of business end-points justifies the use of a shared platform, the members of the initiative will assess whether there is a benefit in adopting a hub approach, which is already happening in the London market. If that happens, the existing messaging gateways will still be of value to implementers in order to connect with the hub. There is no guarantee of a shared platform/hub in the future, nor any reason to wait for one – business benefits can be derived today and for the foreseeable future by implementing peer-to-peer messaging that conforms with the Global (Re)insurance Best Practices – Accounting, Claims and Settlement.
How do I know who has implemented Ruschlikon?
To find out the latest information on who is implementing Ruschlikon, check out the capability matrix, available on the website. You can also have a look at who the Ruschlikon members are working with by looking through the engagement matrix, also available on the website.
How can I raise questions and suggest changes?
While the ACORD standards that underpin Ruschlikon are essentially stable, thus giving a firm base for development of systems that can be rolled out to many business partners; there is always scope for questions to be raised and for future changes to be proposed. The Ruschlikon “Business Implementation Group” (BIG) meets monthly via teleconference and also face to face twice per year, and this is an opportunity to get together with other implementers to raise questions on how the electronic messages cover detailed business requirements and also to propose changes for consideration by the implementation community. Any broker, cedent or carrier can join BIG – and changes agreed there are then promoted via the ACORD agile maintenance process for incorporation into the ACORD standards used by Ruschlikon. BIG is also where the migration to future new versions of the standards are agreed – content and timeframes – so it is a great place to keep abreast of what is coming down the line and also to influence this.