Regulatory-driven statistical reporting was first established for the insurance industry by the NAIC Property & Casualty Model Rating Law some 70 years ago. And the practices and procedures that underpin insurer statistical reporting have changed little in the decades since. Now, however, statistical reporting is being modernized with the development of the open Insurance Data Link (openIDL). Dina Burgess, Manager of Enterprise Risk Applications at AAIS, talks about the need for this change and the new ease, efficiency and accuracy that characterizes modern regulatory reporting.
Q. How would you describe the state of statistical reporting?
Dina Burgess: Challenging, to say the least. So much has changed since the Model Law was enhanced. Insurers have moved from paper-based forms and a scarcity of data to automated computer-based systems that collect and integrate a growing abundance of data from stakeholders across the industry, the policy lifecycle, analytics and risk models. New and challenging risks emerge often and quickly. Advances in technology and changes in social norms require new insurance products and services, and speed to market is critical to success.
Yet statistical reporting has stayed very much the same since its beginning. Consequently, it has become a burdensome process that provides little value to insurance carriers and insufficient information to regulators. There is so much data out there, in so many different formats. Often though, the information provided to regulators is stale and methods of delivering data are dated. Some regulators accept emails, others want a hard copy delivered via the US Postal Service. The process is time-consuming and expensive.
Q. It’s clear how this predicament has come about. How does the industry move beyond it?
DB: As an NAIC-licensed statistical agent, AAIS is an intermediary between insurers and regulators. We collect and aggregate policies and claims information from carriers to help regulators monitor and ensure a fair and healthy market, to preserve the long-term solvency of insurance companies and protect insurance consumers from unfair and discriminatory treatment. Our role, and the role of statistical reporting, remains as vital than ever. But we knew the means and the methods desperately needed modernization.
What is the solution?
DB: Several years ago AAIS began investing in the infrastructure needed to modernize advisory services end-to-end for our Members. Central to that modernization was the development of the open Insurance Data Link (openIDL).
openIDL is the next generation of regulatory reporting. It's the first blockchain platform that allows carriers to efficiently provide information to answer data calls and fulfill reporting requirements, while also keeping their data private. It offers regulators the ability to collaborate with carriers and formulate the right questions to cut-to-the-chase and get precisely the answers they need for their jurisdiction. It requires permissioned access at the same time it provides results quickly. When it comes to regulatory reporting, openIDL is a game changer.
Can you share a bit about the technology behind openIDL?
DB: openIDL is an open-source private network that uses blockchain technology to enable secure and permission-based collection and sharing of statistical data. While AAIS began its development, it has recently been adopted as a Linux Foundation project, and it runs on the Linux Foundation’s hyper ledger fabric.
Q: What else is AAIS doing to modernize Advisory Services?
DB: As the only non-profit and modern Member-focused insurance advisory organization AAIS gives Members exclusive access to a comprehensive selection of programs, unparalleled services, and state-of-the-art advisory tools and technologies that support operational efficiencies and growth objectives. More than 700 insurance carriers across the US depend on us for quality policy forms and manuals.
Our approach is different because we are building a community that helps each of our Members individually and the overall industry to thrive and to achieve their goals – including more effective, efficient regulatory reporting, speed to new markets, insights on emerging risks, and more.
In line with our focus on building a community, we recently migrated openIDL to become a Linux Foundation project, where it is being further advanced as an open-source ecosystem serving the entire insurance community and its stakeholders.
AAIS has also redefined Membership, giving Members access to all of our solutions and services, including openIDL, for one fee: Our All-Access Membership model enables all Members of the AAIS Community to realize the collective benefits of our modern, agile organization and our advanced advisory solutions.