5 key considerations for a rating engine optimized for ISO ERC

Growth, operational efficiency, and regulatory compliance are some of the compelling reasons for insurers to invest in a modern rating engine solution with support for ISO Electronic Rating Content (ERC). A modern rating engine with support for ISO ERC can empower insurers to rapidly launch new ISO lines, new ISO-based insurance programs, and easily and quickly update and deviate ISO rates & rules without any coding effort. Here are the five key considerations when choosing a modern rating engine platform that automatically and fully absorbs ISO Electronic Rating Content.

5 key considerations for a modern rating engine that fully leverages ISO Electronic Rating Content.jpegConsideration 1: Breadth and depth of Lines of Business supported by the rating engine

With growing competition in the market, insurers are trying to proliferate their businesses by adding new lines and entering new territories. Rating is a crucial component of these initiatives. When choosing a rating engine, 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 & adaptability of rating engine would become critical over time to accommodate insurers’ strategic business goals.

Considerations 2: Timely implementation of ISO updates

While evaluating solution options, insurers need to determine if the rating engine is capable of automatically and fully absorb ISO ERC as-is without any manual effort. This would help insurers manage a lifecycle around ISO circulars and stay current with ISO’s most recent filings with minimal effort. Further, this would avoid time-consuming and costly activities of interpreting, analyzing, developing specifications, coding and testing changes. In other words, a rating engine with support for ISO ERC helps insurers get ISO 'interpreted by ISO' electronically for timely deployment.

Consideration 3: Support for company deviations

Most insurers apply deviations to ISO’s base content to create proprietary rates and rules to offer niche products to their customers. The rating engine solution must provide options for overriding loss costs, rules, forms, algorithms, etc. in a separate layer, while enabling insurers to take on new changes without disturbing these deviations. 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 a time-to-market perspective.

Consideration 4: Ability to assess changes

We know that ISO publishes a lot of circulars. With time, it becomes incredibly challenging for insurers to keep track of changes from one version of ISO changes to another, the impact of a change to insurers’ business strategy, insurers’ book of business, and company specific deviations. Hence, a rating engine’s ability to assess changes from a previous ISO version and the impacts of a new version is crucial to understand the changes and in making informed decisions to adopt the changes.

Consideration 5: Ability TO Extend Online Rating & Quoting

All the above capabilities of a rating engine will not be sufficient to gain full benefits of ISO ERC unless the rating engine is able to extend its services to quote and policy management systems. 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. 


To ensure that an insurer is well-positioned to continue updating existing products, offer new products and line of business to its customers with speed, accuracy, and ease, it is imperative that insurers must invest in a modern rating engine. However, the extent to which insurers can reap all the benefits of a modern rating engine solution, with support for ISO Electronic Rating Content, will vary based on the extent to which the above considerations are contemplated in insurer’s solution.

View this on-demand webinar where Anand Rajaraman, Director, Product Management, ValueMomentum, showcasing how easily insurers are implementing ISO changes using iFoundry modern rating engine solution in a live demonstration
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