Are you wary of the amount of effort and time it takes your company to launch a new line of business? A new modern method could be just what you need.
In a recent webinar, Karlyn Carnahan, Research Director at Celent shared that the number one thing driving IT investments and budgets for the insurance industry in 2016 is growth, citing a recent Celent survey. According to the findings of the survey, efficiency and diversification were the next two drivers of investments. Insurers are trying everything they can to grow their book of business. Karlyn further added that finding ways of accelerating in the market with new products, entering new states quickly, and doing it efficiently are key strategic initiatives for many insurers today.
To grow business by entering new states and adding new line of business & product effectively, many insurers opt for ISO bureau content. ISO Electronic Rating ContentTM by ISO, together with a modern rating engine provides insurers with an excellent solution to simplify, automate and speed-up the adoption of ISO content. Such a solution also helps insurers keep up-to-date with the numerous changes published by ISO on advisory loss costs, rules, and forms with ease.
Developing products based on ISO
In today’s market, insurance products are changing dramatically and more frequently. Insurers who are slow to respond to changing market dynamics could potentially lose out on new market opportunities.
Insurers leverage ISO’s industry-standard products to accelerate introduction of new line of business and related products. For example, the commercial lines of business are heavily based on ISO. Many insurers use company specific internal data, loss cost multipliers combined with industry loss costs provided by ISO to create niche and unique products. With a modern rating engine solution, insurers can easily extend ISO definition and create their own proprietary rate plans without any coding effort.
Insurers need to differentiate their offerings
Karlyn also highlighted that insurers are focusing more on product differentiation and trying to expand their range of products to a variety of new market exposures. They are creating products specific to industries and circumstances. They are focusing on complex rating schemes, which often are based on variety of new data elements.
To this end, ISO offers a broad range of insurance programs that makes it easy for insurers to enter and compete in new markets with new offering. A modern rating engine that supports ISO ERC helps insurers reduce costs, time and complexities associated with launching new lines of business – allowing them to make better decisions on risk selection, while streamlining product updates.
The newer vs traditional method of ISO implementation
The traditional method of analyzing, interpreting and implementing ISO circulars is largely manual, inefficient and expensive. A typical method would involve tracking, logging, analyzing, modifying, filing, and updating the circulars - a laborious and time consuming process. Hence, insurers were challenged to respond to ISO changes by their effective dates and at risk for premium leakage, non-compliance with regulatory guidelines. These challenges were negatively impacting insurers’ ongoing maintenance of ISO changes and ability to bring new offerings into the market.
ISO Electronic Rating Content solution addresses these challenges by delivering already interpreted advisory loss costs, rules, and forms in electronic format. A modern rating engine that supports ISO Electronic Rating Content can help insurers import ISO content automatically, thereby drastically cutting down on the time, effort and cost in managing ISO changes.
Are you equipped with the right rating solution?
Specialty, Commercial Lines, Excess & Surplus Lines Insurers and Program Administrators are modernizing and consolidating multiple rating engines to have a more configurable solution. These solutions undoubtedly require support for ISO, and as by extension, must leverage ISO digitally – that is any modern solution must support ISO Electronic Rating Content. Insurers who are equipped with such an advanced rating engine solution can rapidly minimize implementation efforts and focus more on bringing innovative products into the market.
Click below to view the on-demand webinar Insurers Can Now Update ISO Rating Content Digitally to see how ValueMomentum’s iFoundry with ISO ERC have deployed niche products based on ISO as well as ISO accommodation lines in 30% of the time it would take to implement.