By year's end, a Risk & Insurance Management Society Inc. task group plans to begin seeking support from insurers and third-party administrators for making certain claims and loss data from their unique systems available in a standard format.

This plan would not require insurers and TPAs to agree to a data standard that would force them to change how they collect and organize the data in their systems. Instead, the RIMS group will ask insurers and TPAs to participate in the much less costly effort of culling data from their respective databases and making one more data reporting format available to their clients, explained Chris Duncan, a risk manager who is spearheading the effort.

In the meantime, other efforts are underway to drive the industry toward some semblance of data standardization. Among the groups heading those campaigns are a group of employers with large workers compensation exposures and the Public Risk Database Project.

Today, a group of large employers, insurers, TPAs and brokers kicks off a two-day meeting on how to adopt a data standard. The group's goal is comparable to that of the RIMS task group.

This month, the Columbia, Md.-based PRDP plans to unveil its general liability data standard for public entities. A PRDP official envisions risk managers in the private sector also using the standard, though admittedly with some limitations.

Risk managers have been hoping for a data standard for years so they can be assured of having clean data over time to measure, for example, loss trends and cost of risk.

Without such a standard, insurers, TPAs and risk managers define data in different ways. For example, some insurers and TPAs reflect paid claims in ''reserves,'' while others do not. Likewise, some include attorneys fees in claims payments, while others do not.

Compounding the problem is that risk managers typically use several insurers. As a result, risk managers find that a single data element may be defined in numerous ways by their insurers.

In addition, if risk managers change RMIS vendors when upgrading their information systems, the two systems likely will not interpret data similarly. Risk managers will need to work with the vendors to map the data—or help the new system recognize and accurately interpret the data from the prior system.

The data conversion process adds to the cost of the new system and requires risk managers to devote a lot of time to help vendors map the data.

Data definition discrepancies can be expensive for risk managers not only in terms of money and time, but also in lost data analysis opportunities.

Because of the data ''Tower of Babel'' created by the lack of a standard, risk managers also have a difficult time benchmarking with one another, noted Mr. Duncan, who is director of risk management and insurance at Delta Air Lines Inc. in Atlanta.

''Everything drives off of having good, clean, consistent data over time,'' he said.

Outweighing the demand for a data standard until now has been the difficulty of moving the various insurers and RMIS vendors with stakes in the process to agree on a single set of definitions for data.

Data standards have been implemented in other industries, however. Perhaps the most notable example is the financial services industry, where data standards have, for example, allowed bank customers to access cash from various automated teller machines nationwide. Retailers and gas stations can use the same type of electronic equipment to authorize purchases with different types of credit cards.

Data standards exist even in the insurance industry.

The American National Standards Institute of New York has developed standards that allow insurers to exchange data with business partners without needing to write individual application programs for each data exchange. Those business partners include financial institutions, rental car companies, automobile glass shops and health care providers.

ANSI is also developing implementation guidelines, some of which have been completed, that are designed to help refine the data exchange process further. These guidelines aim to minimize variations that still exist in how companies implement data, pointed out Dave Meiser, co-chair of the property/casualty task group of ANSI's Accredited Standards Committee X12-N.

The ANSI standards, though, were not designed with the exchange of data between insurers and risk managers in mind.

The National Council on Compensation Insurance, a Boca Raton, Fla.-based workers compensation insurance rate-setting and statistical information organization, has its own set of standards that insurers must use when sending the board information on workplace accidents.

During the past eight years, the International Assn. of Industrial Accident Boards & Commissions of Lawrence, Kan., has coordinated a joint effort among state workers compensation agencies, the insurance industry and employers to develop uniform data standards and formats for paper and electronic data exchanges (BI, Oct. 26, 1998).

The standards were designed to help employers comply with the first-report-of-injury requirements and other reporting requirements of workers comp regulatory bodies. Insurers and TPAs can file those reports on behalf of employers in most jurisdictions.

Insurers and employers also have used the IAIABC standards in exchanging data among themselves.

RMIS vendor DORN Technology Group Inc., a Livonia, Mich.-based subsidiary of Policy Management Systems Corp., has developed a data standard. The standard is available at no cost to risk managers, regardless of whether they are clients, and even to competitors. The standard has been adopted by 300 organizations, including insurers, TPAs, and their clients, said DORN President Mark Dorn.

But several risk management consultants and insurer representatives said they doubt that insurers and TPAs would be willing to adopt a standard developed by a single RMIS vendor.

Some observers say insurers, TPAs and RMIS vendors have resisted adopting a data standard for business reasons.

''Insurance companies and TPAs have invested millions of dollars over time in legacy systems that define data for themselves very well,'' Mr. Duncan of Delta Air Lines said. ''It's like moving a mountain.''

Mr. Duncan said he was not suggesting that vendors are not interested in adopting a data standard, but that doing so could severely tax their limited resources without adding much to their bottom lines.

Representatives for several insurers, TPAs and RMIS vendors, though, contend that a standard would improve their profitability, because they often cannot recapture the full cost of converting data.

Still, those same individuals agreed that they do not expect to adopt a single data standard for two to three years.

RIMS is unable to head a data standardization effort because of the lack of funding for such a project, explained Linda Lamel, executive director of the New York-based organization.

But the RIMS Data Standards Task Group has developed an approach that the group's members hope can substitute for a standard until one is adopted, said Mr. Duncan, who heads the three-member subgroup of RIMS' Technology Advisory Council. Besides Mr. Duncan, the group includes Mr. Dorn and Renee Yozzi, a risk management consultant with broker Hobbs Group P.L.C. in Malvern, Pa.

Mr. Duncan explained that the RIMS task group is taking a ''more flexible'' approach to the issue than many groups have attempted.

He explained that other efforts have focused on the expensive prospect of standardizing how data flows into insurers or TPAs.

The RIMS task group instead is looking at the ''myriad'' ways that insurers and TPAs provide risk managers with claims and loss data without ''asking anyone to change how they collect data,'' he said.

In addition to providing specially tailored reports to individual risk managers, the RIMS task group wants insurers and TPAs to use a tool that extracts data from their databases and presents it in a standardized format to their clients.

Insurers and TPAs then could develop applications for that data, Mr. Duncan said. For example, they could develop a benchmarking tool that would allow scores of Fortune 500 companies to compare workers comp metrics, such as the average cost of claims in California, on an apples-to-apples basis.

Because of the ''vested interest'' many parties have in this issue, ''RIMS is trying to take the politics out of who develops and owns (this process),'' Mr. Duncan said.

The RIMS task group has enlisted the help of the insurance and the management information sciences fields at the University of Georgia to help in that endeavor, which initially will focus on the workers comp and auto liability areas.

By year's end, the university will survey the 15 to 25 largest RMIS vendors, insurers and TPAs on how they define various pieces of workers comp and auto liability data, according to Mr. Duncan.

By March, the departments should have analyzed those definitions and determined their commonalities, he said. The departments then will develop a single file format that those companies can use to add one more data extraction process to the stable of those already in place for generating tailor-made reports for clients.

Before the next RIMS conference begins on April 30, the task group would like to obtain a commitment from the surveyed companies to offer that data extraction tool to their clients. ''I hope they say we can have that done in a month or two'' after committing, Mr. Duncan said. That would make the tool available by the end of June 2000 at the latest.

Mr. Duncan said offering this data extraction tool to risk managers should not involve a lot of work for insurers and TPAs, since they already are willing to provide so many clients tailor-made data extractions.

They may have to change how they manage and define some data, but they already do that when providing tailor-made reports to clients, Mr. Duncan said.

Mr. Duncan said he hopes the plan, if adopted by the providers, would benefit them as well as risk managers. ''Hopefully, they'll have to do less of the 1,000 individual efforts,'' he said.

Mr. Duncan acknowledged ''it's a certainty'' that the data extraction tool will not allow insurers and TPAs to capture all the data that risk managers would want.

The RIMS task group is comfortable with that, he said. ''We're pretty convinced that if we try getting 100% of the data right, we'll never get there,'' explained Mr. Duncan, referring to a data standard. ''We want to get 80% of the way there and then turn the industry loose.''

A single standard still is needed, Mr. Duncan said. He said he would hate to see a unique data standard developed for each industry, because risk managers need to benchmark across industry lines.

As the RIMS task group prepares to begin its effort, a group of about a dozen employers, insurers, TPAs and brokers is coalescing around a similar objective.

The group, which initially will concentrate on the workers comp area, is scheduled to hold its maiden forum in Chicago today and tomorrow.

The employers are part of the Workers Compensation Quality Council, which is a group of Marsh Inc. clients with large workers comp exposures.

Marsh's Chuck Wight, who organized the forum, said he could not identify any of the employers that will be sending representatives.

Representatives from the insurance and brokerage industries will include officials of American International Group Inc. and Marsh. Officials from other insurers and brokers also have been invited to participate.

A key focus of the meeting likely will be coordinating an effort to produce a white paper on the issue, said Mr. Wight, a senior vp and a managing consultant with the Marsh Risk Consulting division in San Francisco.

Participants in the meeting, though, do not want to duplicate or interfere in any ongoing efforts, said Mr. Wight, who said he was not aware of the RIMS task group's efforts.

The PRDP may have made the greatest progress toward developing a data standard.

After issuing its proposed general liability data standard in April and accepting comments on it until August, the PRDP is finalizing the standard. It expects to release the standard sometime this month, said Cathy Spain, executive director. Ms. Spain said she envisions both public- and private-sector risk managers taking advantage of the standard.

The PRDP was created with $5.2 million of seed money from the 1994 settlement of the massive antitrust lawsuit against the insurance industry. The project's ultimate goal is to provide a database that public entity risk managers could draw on in managing their organizations' exposures and risk-financing costs.

Public entity risk managers can use the database to benchmark various metrics, such as their workers comp and tort liability claims experience and their risk-financing costs. They also could use the database to benchmark the best practices in minimizing risks and costs.

PRDP officials hope to select a data warehouse vendor this month and demonstrate the warehouse at the Public Risk Management Assn.'s annual conference in Charlotte, N.C., next June.

But before public entities could begin transmitting all of the data that the PRDP needs for the database, the project first had to be able to convert the data into a standard format, Ms. Spain explained.

PRDP officials decided to begin by standardizing general liability data. They completed a feasibility study on the standard in 1997 and began developing the standard last year.

The standard will give database users the opportunity to access data that is more descriptive than the data available in other systems, according to Ms. Spain.

For example, in coding the cause of an accident in which a patron slipped on a freshly waxed floor, other systems may limit risk managers' description of the accident to a ''trip and fall,'' Ms. Spain said.

But that description ''actually is the result, not the cause'' of the accident, she said. ''Our system allows you to say the cause was a freshly waxed floor.''

The PRDP will make the data standard available on a Web site at no cost and will not require organizations to pay a license fee to implement it.

The project will charge users, however, for a reference manual that will update the standard.

In addition, anyone who intends to use a derivative of the PRDP standard in developing any other data standard first would have to obtain the PRDP's consent.

Ms. Spain acknowledged that there will be some shortcomings in the PRDP's data standard for risk managers in the private sector. For example, manufacturers would not find the cause-of-loss codes they would need, Ms. Spain said.

''But that's only one data element out of 200,'' she added.

In addition, the standard would not provide private-sector risk managers sufficient codes to denote their organizations' exposures because public entities' exposures are different, according to Steve Bruza, project manager for the PRDP.

But the PRDP probably will develop that coding further to benefit risk managers in the public as well as private sectors, Ms. Spain said. She said the project likely will survey risk managers to develop the coding.

''It's a big job for the public sector. That's why we've invited RIMS to join us,'' Ms. Spain said.

RIMS has not joined in that effort to date, however. Before it would, the organization would have to study the products and services the PRDP is offering and determine how beneficial they would be for RIMS members, Ms. Lamel said. RIMS has not set a timetable for making that decision, she said.

Any assistance that RIMS would provide to the PRDP most likely would be in the form of guidance rather than funding, Ms. Lamel said.

Mr. Duncan of the RIMS task group praised the PRDP's ''phenomenal piece of work'' and said he wishes the project ''a lot of success.'' He observed, however, that many companies in the private sector currently would not be able to take advantage of the project's data standard.

Once a data standard is adopted, a recent Internet advancement will facilitate its use, according to systems experts.

The World Wide Web Consortium has approved the Extensible Markup Language standard. The specification allows those who want to exchange data over the Internet to tag Web-based documents in a way that gives customized definitions to data.