A new note from the CIO of Atrium says that the London Market Group’s Data Council is aiming to create a fully automated, computer-based digital contract for insurance business.
Writing on the Atrium website, Justin Emrich says that the ultimate future vision is a fully computable contract.
He wrote: “Computable contracting is a set of approaches that enable contracts to be built as digital objects, with significantly greater levels of in-built structure and logic, and represented in a way that is understandable (and usable) by humans and computers. As such, computable contracting represents an important shift in thinking, as well as an opportunity to develop the foundations upon which the insurance industry is built. This vision is one where we are no longer trying to extract and interpret data out of documents, because the document is the data.”
He added: “This future vision is akin to moving from Vinyl to Streaming, and there will be intermediate steps along the way. We will digitise every number and every word in the contract, resulting in instant contract production and data capture into downstream systems, including accounting and settlement. It means that ‘documents’ are the human readable output from the process, not the start point (it might look and feel like a document, but it will be a series of digital objects). Today we start with documents and then expend untold sums trying to exact the data. The future is the other way round.”
Emrich laid out a number of steps towards achieving the goal.
He said that the first of these would be to define the core data needed to drive processes with central services. After, work will be done to defined how the Core Data Record (CDR) should ‘flow’ between parties, along with other information. After that, work will be done to structure the content within the contracts.
This, wrote Emrich, will be the responsibility of the Intelligent Market Reform Contract (iMRC).
He wrote that this process would include specifying all the data that is needed downstream. The second part of the iMRC is being far more specific as to how certain data elements should be represented.
He added: “It is important to note that we are not proposing that all contracts conform to any one specific format. That will be left to individual firms, but firms will be required to include the essential data and include that data in a prescribed format.”
