ACORD Members and Insurance Industry Luminaries Gather for Annual Conference to Gather Insights, Share Knowledge and Celebrate Innovation
BOSTON, MA., October 26, 2017 – ACORD, the global data standards-setting body for the insurance industry, today unveiled two new value creation studies and a research & development division. In addition, the organization also reaffirmed its commitment to workplace diversity by announcing a new white paper in partnership with Million Women Mentors, an initiative of STEMconnector® that supports the engagement of two million women (and men) in STEM to serve as mentors by 2018.
The announcements came on the closing day of ACORD2017, the insurance industry’s leading annual Standards, business and technology event that featured industry executives and luminaries. The event also served as an opportunity for the insurance industry to come together and network, share insights and celebrate innovation. On the innovation front, ACORD2017 recognized the winners of the ACORD Insurance Innovation Challenge (AIIC), which brings together insurance companies to demonstrate ideas and business practices that will help transform the way the industry does business.
“As the foremost association representing the global insurance industry, ACORD is in a unique position to deliver thought leadership and promote innovation across the insurance value chain,” said ACORD President and CEO Bill Pieroni. “Our annual conference presents our members with a remarkable opportunity to network and share ideas, and this year we’re excited to share with them two groundbreaking studies on value creation in both the Property & Casualty and Life & Annuity industries. These studies, which measure the level of value created and destroyed by the industry over the past 10 years, also provide insights into the capability imperatives insurers will need to consider as they redefine their business models to meet the opportunities and challenges in the years ahead.”
The conference featured a dynamic lineup of keynote speakers, including Heather Payne, CEO of HackerYou, Canada’s original programming bootcamp and the only one of dozens around North America founded by women; and David Eagleman, a neuroscientist and bestselling author whose books include Incognito and Wednesday is Indigo Blue.
Pieroni kicked off the conference with a presentation touting the value creation studies, and a passionate appeal to embrace technology, innovation and diversity in order to grow business and move the insurance industry forward.
New Studies Highlight Dramatic Value Creation in Both US Property & Casualty and Global Life & Annuity
The highlight of the ACORD2017 conference came during Pieroni’s keynote address, when he unveiled the results of two new value creation studies.
The ACORD U.S. Property & Casualty Value Creation Study measured the amount of value created by the insurance industry over the last ten years. In particular, the study analyzed the strategic and tactical capabilities employed by carriers generating the highest levels of value.
The study showed that more than $230 billion in value was created during the ten-year span in the U.S. Property & Casualty space with those companies generating value (84) vastly outnumbering those who destroyed value (16). This represents a departure from previous editions of the study in which the number of value creating and destroying insurers was more evenly distributed.
“Increased focus on underwriting profit, digitization, and changed macroeconomic conditions were cited as key reasons for the shift,” said Pieroni. “Amplified alignment between strategic intent and capabilities is the key differentiating factor separating sustainable value creators from destroyers. We are finally seeing the true impact of decades of technology investment on results.”
The ACORD Global Life Insurance Value Creation Study took a different approach to measuring value by calculating the share price appreciation and dividends paid across fifty of the world’s largest publicly traded life insurance carriers over the last six years.
The study uncovered three categories of performance – Value Creators, Value Neutrals, and Value Destroyers. As a group, value creating life insurers delivered a return of over 136% to shareholders, nearly twice the return of the S&P 500 over the same time period. In contrast, value neutrals returned 41.6% and destroyers lost 18.0% over the study period.
The complexity of the life insurance industry may be a key driver behind the wide range of returns evident in the study. According to Pieroni, “In contrast to the P&C market, where insurers must employ multiple strategic options at the same time across all markets, life insurers must be able to execute multiple strategic options separately, each customized to unique product and geographic market segments.”
Both studies leverage the annual financial filings of top U.S. property-casualty insurers and global life-annuity insurers. The P&C study employs a proprietary methodology to determine the total amount of value generated by each carrier as well as identifying the source of value generated through both underwriting and investment activities. The Life Insurance study measures value as determined by the apperception of company share prices, plus the amount of dividends paid out over the study period. In addition to financial data, the analysis leveraged company reports, analyst research and executive interviews. Finally, a number of strategic and tactical factors were examined including business strategy, premium and product mix, ownership, brand approach and more.
Innovative ACORD R&D Division Drives Thought Leadership
Key accomplishments of the ACORD Research and Development (R&D) division were also showcased during the conference. Launched late last year and headed by David Sterner, R&D conducts strategic market research focused on the global insurance industry.
Sterner, who has spent more than 20 years in similar roles at EY and other firms, leads a team of strategic analysts generating global intellectual capital for ACORD members and the industry. The group works with both ACORD and its membership to identify key market trends and drivers, explore the impact of disruptive technologies, and highlight the implications both of these have on the industry.
“The ACORD R&D division creates a new source of value for ACORD’s members, delivering industry insights and information of strategic importance to the industry. R&D also plays a critical role in helping all of ACORD’s divisions provide value-added assets and services to our membership,” said Sterner. “What sets us apart from traditional business research is a combination of consulting, market research and equity-research style analysis. I’m looking forward to working closely with the rest of the ACORD leadership team and our members to deliver value across the entire insurance industry ecosystem.”
Advocating Workplace Diversity with Support for Million Women Mentors
ACORD furthered its commitment to diversity by announcing its support of Million Women Mentors, an initiative of STEMconnector® that supports the engagement of two million women (and men) in STEM to serve as mentors by 2018. ACORD continues to elevate the awareness and importance of Science, Technology, Engineering and Math (STEM) by encouraging insurance stakeholders globally to support the advancement of women.
"Companies need to bring different perspectives to the table in order to succeed. Hiring a diversified team of professionals is not only critical to cultivating a better working environment and retaining a budding workforce, but to attracting new customers and clients,” said Tanya Krochta, Senior Vice President and Chief Administrative Officer, ACORD.
ACORD has always championed women, particularly in leadership positions, and strives to serve as an example for how a diverse workforce drives positive results.
New TCS Partnership Expands ACORD Reference Architecture Offering
ACORD also unveiled plans for an exclusive initiative with TCS to enhance and expand ACORD’s Reference Architecture and all reference assets to support member and industry priorities. Launching next year, TCS will bring its valuable industry experience across the insurance domains to enhance ACORD’s internal capabilities.
The partnership will extend the value of ACORD’s Reference Architecture for the immediate and near-term to align with evolving digitization demands.
ACORD Insurance Innovation Challenge Winners
ACORD2017 was also the stage for the final round of the ACORD Insurance Innovation Challenge (AIIC), the world’s premier event for innovation in insurance technology that brings together insurance companies of all sizes across all lines of business, investors and venture capital partners, technology startups, and industry innovators.
In the Industry Innovator Category, IVANS Insurance Solutions and Synechron, Inc. tied for first place. Matt Foran accepted on behalf of IVANS Insurance Solutions, while Ashish Nangla and Naman Verma accepted on behalf of Synechron, Inc.
Taking home the top prize in the Startup Disruptors Category was Insurance Agent App, with Matt Aaron and Kiki Johnson accepting on behalf of the company.
Eighty-eight companies competed globally for the opportunity to present live at ACORD2017 and win startup money, ACORD membership, and consulting support from ACORD and other member organizations.
“We are pleased to continue to foster innovation in the insurance industry and encourage global information sharing that inspires positive disruption,” said Pieroni. “Looking into next year, AIIC will evolve into an insurtech challenge as we continue to champion digitization and supporting improvements in the industry.”
ACORD thanks the following sponsors for their support of ACORD2017 and continued partnership: ACORD Solutions Group, EY, Duck Creek Technologies, KMPG, Oracle, Tata Consulting Services, L&T Infotech, Pegasystems, and Salesforce.
ACORD (Association for Cooperative Operations Research and Development) is a global, nonprofit organization serving the insurance and related industries. ACORD facilitates fast, accurate data exchange, and efficient workflows through the development of electronic standards, standardized forms, and tools to support their use. ACORD members worldwide include hundreds of insurance and reinsurance companies, agents and brokers, software providers, financial services organizations and industry associations. ACORD maintains offices in New York and London. Learn more at www.acord.org.