While the Insurance Industry focuses heavily on ACORD messaging, the good old Electronic Data Interchange (EDI) standards are also still in use. For example, EDI standards are used by insurers for reporting workers’ compensation FNOI and subsequent claims data to all 50 States. In some States such as Vermont, all insurers are required to report workers’ compensation claims using the IAIABC EDI format. But how do insurers maintain their existing EDI systems while evolving them to participate in today’s digital insurance marketplaces?
Given that these standards were created in the ’80s and had to meet the more complex requirements of the 21st century, an attempt has been made to put lipstick on a pig, resulting in a bloated, complex EDI standard that is difficult to understand and implement.
There are more players in the digital insurance ecosystem, and along with that, there are multiple data formats like CSV, XLS, positional files, etc. Therefore, exchanging data between partners has become a complicated affair. Insurance companies that want to participate in digital ecosystems need to have data in newer JSON data formats that will enable dynamic sharing of data among different partners: the carriers, agencies, brokers, wholesalers, distributors, and business partners.
While newer XML and JSON data standards make it relatively easy to model hierarchical data, EDI standards make it incredibly hard to parse, create, and process hierarchical data. EDI standards consist of Segments, Sub-segments, Components, Sub-Components, and Loops. Validating EDI data is another enormous challenge, resulting in substantial implementation timeframes and considerable time spent on debugging when issues arise post-go-live.
The ACORD XML standards are highly customized and have subtle differences between companies. Processing them correctly and ingesting them requires deep industry knowledge and lots of custom coding. Also, as a lot of sensitive data is passed along, keeping the whole process secure requires complex infrastructure and a mature business process.
So, you can see that these complex structures and multiple data formats make It very complex and time-consuming for product development associated with initiatives to add new partners or to participate in digital ecosystems. Along with extensive testing, regulatory requirements also puts enormous pressure on internal resources.
It is not just the data formats that partners need to agree on. After businesses agree on the data exchange formats; they must then agree upon the data transmission protocols. The data transmission protocols are the methodology used by the sender and recipient to exchange the documents. Standard protocols are:
After businesses agree on EDI formats and protocols, the next step is to agree on how to transmit the data to your business partner.
Peer-to-Peer: Peer-to-peer is when you connect to and send EDI documents directly to your business partner. Since each business partner can have its own format and protocol, that would mean each enterprise would have to build a platform to be able to intake data in multiple formats/protocols. This entails having and managing all the software and infrastructure in-house.
Managed Cloud Service Providers: Businesses realize that managing its own Data Exchange network internally is an expensive process that takes away from its core mission of providing the product to its customers. Managed service providers have stepped into managing the day to day complexity of data exchange. They use powerful EDI translator to translate the data so it can be used by a software application for straight-through processing.
Using a fully managed EDI service frees up internal staff and at the same time improves the accuracy and efficiency of data being exchanged. The key capability the managed service provider would need, is the ability to accept/ingest data in any format along with the ability to integrate it and send it to partners and regulatory authorities in their preferred formats.
We see several specific tools in the marketplace, but each of these tools is focused on converting data say from format A to format B, but not format B to format A and A to B, C, D.
Utilizing a fully managed EDI service is a step in the right direction but is not going to provide all the capabilities required, for example, the ability to participate in a digital insurance marketplace.
The MOND Agile platform, along with our cloud managed services, solves this problem. By using innovative AI-based technology, we increase agility and decrease the conversion time frame, at the same time reducing cost and risk. MOND’s microservices architecture and omnidirectional codeless transformations can transform data from any standard and format to any standard and format required by your partners and regulatory agencies. This enables you to accept documents from business partners in any format and be able to transmit it to your business partner using the protocol request by your partner. This allows for faster integration and creates a better experience for providers, insurance companies, and other stakeholders.
So, for example, with our automated omni-directional mapping we can take a CSV file convert it to positional file or take a positional file and convert it to CSV file with minimal coding. It can also take, for example, an XML file and convert it to JSON, CSV or positional file or vice versa. MOND’s industry-first Any to Any converter tool parses the XML data into any format. This capability of the MOND platform tremendously simplifies your business by enabling you to intake data from partners in CSV, XLS, positional files, custom XML and convert to ACORD XML, XBRL, or JSON for integration with your systems and to meet your compliance requirements.
Below is an example of a typical B2B EDI process hosting on the mondCloud platform. B2B EDI processing can use several different data transmission protocols and transmission methods.
In spite of the tremendous advantages of B2B EDI over paper-based processes, companies struggle with building an optimal EDI network. As discussed, it requires EDI standards, formats, mapping, and translation software. Creating all these in-house requires in-depth knowledge, expertise in EDI technologies, and a significant outlay on infrastructure. Once it is built, then it needs an upgrade, support, and maintenance.
The advent of Cloud and SaaS (Software as a Service) has resulted in several managed EDI service offerings. MOND has developed a state-of-the-art cloud native B2B EDI integration platform that is used by innovative organizations to run their data conversions. MOND’s breakthrough low-code B2B EDI Platform offers automated trading partner mapping, one-click deployment, and a revolutionary automatic upgrade feature.
MOND’s managed data services offer end to end solution eliminating the need for in-house infrastructure, or software. Along with providing all the above benefits, MOND EDI offers the following unique features to make sure transition to EDI smooth and cost-effective.
One single, unified platform for B2B and A2A (application-to-application) integration, EDI and API management
Industry’s fastest and most cost-effective dynamic supply chain integration
Industry’s only B2B Business Dashboard for instant status
Supports all EDI data transmission protocols (AS2, RNIF, FTP, HTTP, VAN)
Supports Multiple Data Standards (EDIFACT, X12, XML, XBRL, JSON, SAP, Oracle, Ariba, Custom)
Web Portal Integration/API generator
Secure and scalable cloud platform
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