I was just a kid when video cassette players were launched onto our eagerly receptive world. They marked the beginning of the transition from fixed-schedule television broadcasting to our on-demand viewing pleasure.

I remember the first time my father came home with a rented video cassette player. It was armoured in a durable travelling shell like the cases roadies put music gear in. Papa connected the player using the then-revolutionary push-fit coaxial cable connections, and we watched the film in incredible resolution (40 years before UHD).

But one day our family movie-night picture quality was so drastic even I noticed. When I questioned pourquoi, papa said it was because this time we had a different kind of video machine, called VHS. It isn’t as good as the Betamax he used to rent, he said, but Sony’s groundbreaking tape-and-player technology had gone the way of the dodo.

It wasn’t until years later that I understood why VHS killed the Betamax star. Protective of its intellectual property, Sony had refused to let third-party companies manufacture Betamax cassettes. Not so JVC with its slightly sub-standard version. Japanese Victor Corp. (as it was then known) let everyone make VHS tapes. Cheap recording stock flooded the market, VHS became the standard, and everybody was happy (except a few marketing bods who used to work for Sony).

Flash forward. This week a group of London-market luminaries wrote a rare open letter to the market. Signatories include Lloyd’s new CEO Patrick Tiernan, Lloyd’s Market Association and London Data Council leader Sheila Cameron, and others from various trade associations and market-owned tech-platform suppliers. The short, widely published  note encourages the market to adopt a common data standard.

The letter, reprinted here in The Insurer, has lots of hype. A common data standard will let everyone “unlock magic.” It will “deliver real benefits” and make everyone “part of a future that will be infinitely more flexible.”

Notwithstanding my concern that the authors of the letter don’t quite grasp the concept of infinitely, I agree with everything they say. My only objection is the Betamax problem. The letter goes on to say: “All insurers and brokers who wish to take advantage of a coming digital market will need their data to align to the ACORD GRLC Standard.”  

The standard was selected by London’s Data Council as the market’s standard standard. Chris Newman, President, International of ACORD, is a member of the Council, and a signatory of the letter.

Acord standards may be wonderful, but they’re costly. They may indeed be developed and managed by an industry-owned organisation, but to understand and use them, one has to pay. Unlocking the magic requires every entity adopting the prescribed standard to make a large, recurring payment to Acord. How much? It isn’t possible to say. There’s no rate card. The fee seems to be based on means.

In stark contrast, Open Data Standards from the Oasis Loss Modelling Framework are free and equally (if not infinitely) effective. The Oasis Board currently includes insurance-practising individuals from Swiss Re, SCOR, Aon, Guy Carp, Chubb, Sompo,  Allianz, and others. But no one from Oasis was invited to join the Data Council.

Quotech speaks both languages, but I am disappointed that – after decades of inaction – the market’s non-practising leaders are pushing a pay-to-play model when a completely workable, highly credible, freely available alternative exists.

It’s doubly disappointing that they’re asking for more spending when rates are easing back, pushing all-else-equal expense ratios up accordingly (pardon my French).

But don’t worry. Spend more money, and infinite efficiency is promised just around the corner!