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Technology Blue-sky thinking Aviation Software Alliance partners with Applied Systems to turn theory into reality By Nancy Doucette There’s no mistaking what niche Wings Insurance Agency, Inc., in Eden Prairie, Minnesota, serves. If the name of the agency didn’t give you a pretty good hint, the “on hold” background is air traffic controller/pilot communication from a nearby airport. No “easy listening” music for clients or prospects calling this agency. Agency founder Larry Marrs has focused his energy on aviation insurance for nearly 30 years, first working for a Minneapolis-based MGA that had a concentration on aviation insurance and then moving into the agency ranks in 1984 when he founded Wings Insurance Agency. Today, Wings is both a retail agency and a wholesale operation. The Wings agency staff includes active helicopter and airplane pilots with extensive aviation insurance experience. But no matter how knowledgeable the staff, this niche has its challenges. Some are inherent to the aviation specialty. Others can be overcome through the use of technology. Technology became the focus of Marrs and agency Vice President Steve Bruss, who oversees IT for the agency, about two years ago—specifically, electronic interface capabilities with carriers. Although the agency was using a software system that had been designed for it, a critical deficiency was the system’s inability to communicate electronically with carriers. So, for Wings, communication with carriers included everything from surface mail, to fax transmissions, to use of carrier proprietary Web sites. Electronic interface with carriers, Marrs and Bruss reasoned, would increase efficiency and accuracy, as well as reduce costs. Marrs and Bruss were not alone in their interest in electronic interface capabilities for the aviation insurance community. They soon found that a number of other specialty aviation brokers were in pursuit of the same capabilities. “That was the advent of the Aviation Software Alliance (ASA),” notes Bruss. One of the ASA’s first goals is to develop standards. “Each of the aviation insurance companies has its own version of documents and forms,” he explains. “About all that’s standard is the name of some of the data.” Once the standards are in place, Bruss says, it’s only a matter of time before integrated quoting, inquiries, and other real-time transactions can occur. At the time of this writing, the ASA has 11 member agencies. Its membership, according to Bruss, who served as the ASA’s first president, represents about $250 million in gross premium. “That’s about 16,000 policies,” he says. “About $30 million of that can be attributed to some 6,000 pleasure and business aircraft policies. So the smaller policies are the ones that we need to focus on initially in terms of interface. But,” he continues, “interface also includes inquiries, getting accounts payable online, real-time messaging/alerts. There are a lot of different activities that electronic interface can enhance.” Finding the right partner Marrs knew that Applied Systems was a pioneer in interface activities and a frequent award winner for those activities at the ACORD Conference. Coincidentally, he had known Doug Johnston for years, long before Johnston became executive vice president of interface services for Applied Systems. So when he and Bruss learned that Johnston was going to be in Minnesota making a presentation they made arrange-ments to meet with him to discuss a more up-to-date software system to run the agency as well as electronic interface with carriers. The discussion moved quickly in the direction of Applied Systems’ Vision management system, which includes a custom forms capability that enables the Wings agency to capture more data electronically. “Just in the aircraft policy detail alone, there are over 300 data fields,” Bruss explains. “In our old system there were about 100 data fields. The scope of Vision compared to our old system is like comparing a Boeing 747 to a single engine Cessna.” Add to that the ability to pull in data from various third-party sources—the FAA, for instance, to obtain registered aircraft and registered airport data—and enhanced reporting capabilities to verify that an account has been thoroughly marketed in this post-Spitzer era … “the decision to move to Vision was an easy one,” Bruss recalls. Additionally, Vision has both retail agency and wholesale broker setups within its accounting, so servicing both retail customers and other agencies can be done simultaneously, according to Johnston. And there’s the availability of IVANS Transformation Station—a managed data exchange using Web services and ACORD XML for real-time transactions between agency and carrier systems—to facilitate inquiries and other real-time transactions. Before Wings went live on Vision, though, Donna Gilbert, director of industry standards for Applied Systems, and her team worked closely with the ASA Product Development Committee to develop the custom forms for those coverages that are unique to aviation insurance, as well as output XML messages. “We developed eight of the most widely used applications, including the airport property supplement, airport and FBO liability section, aircraft section, and pilot experience, to name a few,” Gilbert explains. The end result was forms that are ACORD compliant—an important factor if electronic communication with carriers serving the aviation insurance industry is to improve. Additionally, Applied developed ACORD XML Version 1 compliant quote and issue messages for aircraft policy, airport and FBO policy, aviation package policy, hangar liability policy, and products liability policy. “Applied Systems accomplished a lot in a short period of time,” Bruss points out. “Our first conversation with Applied took place in April 2004. By June 1, 2005, the software was up and running in our agency.” The Wings agency was the first of the ASA members to use Vision with its aviation module. By year-end, up to seven more ASA members could be up and running on the new system. Bruss emphasizes, though, that ASA members are not required to use Vision and, in fact, some of their members are using other systems. The over-arching goal of the ASA, he reiterates, is to promote and develop standards within the aviation insurance industry to achieve enhanced electronic communication with carriers. Standards 101 During the same timeframe that the aviation module was being developed, Johnston and Gilbert agreed to assist the ASA in introducing the concept of standards to the carriers that specialize in aviation insurance and encouraging them to move in the direction of agency/company interface. The first joint presentation was made at the Carrier Interface Summit which was held in late April 2005, in conjunction with the Aviation Insurance Association’s international convention. As part of their presentation, Johnston and Gilbert demonstrated how standards allow carriers to showcase their individuality. The carriers that were resistant to standards before the Summit, out of concern of being “spread-sheeted,” expressed enthusiasm for standards by the close of the Summit, Gilbert recalls. “Aviation is a separate division, especially at the large carrier level,” she explains. “So while the idea of standards wasn’t new to the carrier representatives at the meeting, many hadn’t actually seen electronic interface demonstrated.” “XML has become a universal language for transmitting data over the Internet in Web services transactions,” Johnston continues. “So talking to these insurance companies about using XML as a communication language makes sense to them because they’re already using it with their banks and reinsurers.” Standard line carriers have reported savings of between $15 and $25 per application when those transactions are submitted electronically, Johnston says, because there’s no rekeying when the application arrives at the carrier. Additionally, working electronically reduces clerical errors—misspelled names, miskeyed tail numbers or serial numbers. He included this in his presentation to the Summit and it clearly struck a responsive chord with the aviation insurers. “A number of the carriers wanted to get started right away,” he says. In mid-September, the ASA held an aviation standards working group which included a number of aviation insurers, ASA product development committee members, as well as Gilbert and other Applied representatives. During the meeting, the insurers and ASA members finalized the applications and XML messages so that they could be submitted to ACORD for the November standards voting cycle. “We’re making history,” Bruss declares. “This will revolutionize the way we do business.” * For more information: |
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