Considerations for an ISO ERC solution

Growth, operational agility, enhanced customer experiences through product & service innovations and empowerment of business users are some of the compelling reasons for insurers to invest in advanced technologies.

A modern rating system with the ability to leverage digital delivery of ISO Electronic Rating Content (ERC) can be the right step in that direction. It enables you to rapidly launch new ISO-based lines and insurance programs with the ability to easily and quickly update and deviate ISO rates & rules without any coding effort.

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Why secure a modern solution for ISO ERC? – The Goals

Insurance industry is currently facing a generation of most sophisticated and demanding customers of all time. Digital technologies have flourished exponentially in the last decade or so. Brands are taking advantage of the digital power and offering innovative services to woo their customers.

Be it online cab booking, one-click shopping or on-demand access to infotainment & entertainment content, the fundamental customer experience strategy is to provide instant services by enabling self-servicing capability to customers. These innovative customer services are shaping expectations of insurance customers too.

To match these heightened expectations, a large section of the property & casualty (P&C) insurers are already in different stages of enablement of these experiences, which need acquiring the capability to introduce innovative products and services faster into the market.

Empowerment of business users

To expedite the process of ratemaking and product design, business users of insurers need access to external market data such as ISO bureau content, and advanced digital tools and technologies to harness full potential of the data. Today, enablement of these technologies is of paramount importance for insurers.

ISO rating content has been an industry standard for P&C insurers to stay current with the loss costs trends, new products forms, and regulatory changes for ISO based lines. Although the rating content provided by ISO is invaluable, many insurers fail to realize its full benefits in absence of a modern solution.

Moreover, when a ISO change is adopted, business users should be able to analyze impact of the change in their book of business before taking the change into production. Unfortunately, insurers’ current systems were not provisioned for incorporating such advanced feature.

Achieve business agility

Secondly, insurers want their business operations to be nimble and agile. Insurers’ business user i.e. actuaries, product manager, or compliance manager want to experience more frequently, track comparative activity and also want to be swift in their responses to market opportunities.

For example, there are many insurers who want to embrace new ISO updates, but due to the lack of right technology, they usually end up falling way behind in their implementation. ISO ERC solution is well suited to overcome such hurdles.

Digitization of product to deliver new experiences

P&C distribution space is going through a dramatic shift due to the impact of the digital forces. Alternative distribution channels are evolving changing the conventional distribution paradigm.

Powerful digital forces such as mobility, IoT, social media, sensors and analytics are creating newer customer demographics with unique needs and how they to want engage with insurers’ distribution channels.

These requirements are driving insurers to acquire the ability to rapidly access their base line products such as ISO-based products and quickly package and make them available in their digital channels with minimal intervention from their IT department.

Insurers’ current state of technology is restricting its ability to take advantage of these digital opportunities of ISO ERC. Insurers need a solution that enable overcome the current system limitations and achieve the above goals of empowering business, enabling agility and aiding the process of digitizing products. Below are some of the key considerations that insurers need to keep in mind while procuring a solution to enable digital delivery of ISO ERC

1) Leverage out-of-the-box ISO content to create new products; reuse full products and subsets

With growing competition in the market, insurers need to add a new product or line and enter a new territory. The availability of out-of-the-box ISO content can greatly benefit insurers to rapidly launch new products to gain speed-to-market with ISO-based products.

When selecting a solution, insurers must consider whether or not it meets insurers’ need for current and future lines and territories without needing to put a great deal of effort. Scalability and adaptability of the solution would become critical over time to accommodate insurers’ strategic business goals.

Moreover, in today’s age of specialization, insurers need to reuse their lines of business and create tailored packages to meet the needs of rapidly growing niches. Most importantly, ISO content is interpreted by ISO, so insurers need not worry about by manual intervention.

 2) Access ISO circular changes in implementable ready form

Ideally, insurers’ system should be able to automatically and fully absorb ISO ERC as-is without any manual intervention, which helps timely adoption of the changes. But, many insurers fall behind in keeping up with the ISO updates. This leads premium leakage and sometime claim related issues.

Along with ISO ERC, ISO offers very powerful capabilities like automatic maintenance feed and automated release notes. All of these are intended to aid the process of new update from ISO to quickly identify what really the change and make it available in the software system so that there is instant visibility as to what action needs to be taken.

 3) Manage exceptions; adopt updates without impacting prior ones:

Every insurer applies deviations to ISO’s base content to create proprietary rates and rules to offer niche products to their customers. They should be in a position to manage these unique exceptions. So another important consideration that insurers need to keep in mind is that how they can manage these deviations and create these deviations from ISO easily whether it is rate, loss costs multiplier, rules, logic or they want to create new coverages.

All of these need to be managed in such way that when a new update to the ISO is available these are either maintained as-is or they can be modified very rapidly. The ability to extend ISO’s base content to create proprietary rate plans without being dependent on the software vendor could be a significant differentiator for insurers from time-to-market perspective.

 4) Assess book of business impact to help make informed decision:

It is important for the business users i.e. insurers’ actuaries and product team members to understand the impact of a change to insurers’ business strategy, insurers’ book of business, and company specific deviations or whether a change originates from ISO circular or their own ideas.

With time, it becomes incredibly difficult to keep track of the impact from one version of ISO change to other. If the considered solution provides the ability to visualize the impact, insures can take informed decisions quickly.

 5) Rapidly exchange specification

It is really important for the insurers to have the capability to exchange the product definitions and rate plans easily with different systems. In the digital world, it is imperative that product specifications are easily exchanged between different systems whether it is quoting system, policy administration system, agent portal and any other digitally engaged platform.

For insurers’ agents or underwriters to take advantage and initiate quotes based on current ISO releases, the quoting system must be made available with the recent changes. The rating engine needs to seamlessly integrate and extend services to quote and policy management systems without needing any coding effort.


If you want to ensure that you are well-positioned to refresh your existing products, introduce new products and line of business with speed, accuracy, and ease, it is imperative that you must invest in a modern ISO ERC solution that meets the above considerations.

For more on this topic, view our recent ISO ERC Webinar. You’ll learn about the real-world deployment of an ISO ERC solution at Ryder System by Sue Tribby, Senior Director of Insurance Product Lines to improve your understanding of ISO automation.


For more on this topic, click below to view our recent ISO ERC Webinar - ISO ERC Success Story: Ryder launches and stays current with ISO. You’ll learn about the real-world deployment of an ISO ERC solution at Ryder System by Sue Tribby, Senior Director of Insurance Product Lines.

ISO ERC Success Story: Ryder launches and stays current with ISO

Also, improve your understanding of ISO automation with an actionable-information presentation by Mark Sheehan, VP and Head of Rating Solutions at Verisk. The webinar includes an overview of what insurers from Tier 1’s to start-ups are currently considering as they evaluate ISO ERC options, presented by seasoned insurance market expert Abhijeet Jhaveri of ValueMomentum, an ISO ERC Vendor Alliances member.


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