Keeping ISO rating data current is a complex and labor-intensive process for many insurance carriers. To react quickly to market opportunities with ISO rating content updates, and to keep up with regulatory changes, carriers need to look for solutions that streamline this process. ISO has taken a major step in helping carriers to enhance their go-to-market strategies by making ISO Rating Content available digitally. Modern rating engines can completely automate the management of ISO rate plans (along with their company deviations) and ISO circular updates with this digital content.You can join an upcoming webinar featuring Karlyn Carnahan (Celent), Mark Sheehan (ISO) along with Anand Rajaram (ValueMomentum) and see how insurers can now update ISO rating content digitally.
Read on to learn how you can gain the benefits.
Along came ISO Electronic Rating Content
According to a Novarica report1, handling an ISO circulars manually costs more than $45,000, with complex circulars costing over $80,000 to process.
The manual process of managing ISO circulars is not an efficient way to get up-to-date with ISO lines. To help insurers with the challenge, ISO launched the ISO Electronic Rating Content (ERC) solution with the intention to help P&C insurers keep up-to-date with the huge number of circulars. ISO ERC enables electronic consumption of ISO circulars. ISO ERC contains the rating data and rules for acting upon that rating data directly from ISO’s Commercial Lines Manual (CLM). And the definition of the rating data and rules comes from ISO’s coverage line and actuarial experts!
Independent studies have quantified the implementation savings as below:
- 38% reduction in costs
- 58% reduction in system modification time
Rating Engine that automatically & fully consumes ISO ERC
However, insurers need a modern rating engine to consume this ISO Electronic Rating Content with 100% automation. This can dramatically cut down on the time and effort needed to analyze, interpret, and implement ISO circulars.
Insurers have two broad options to achieve this build a custom rating system that can leverage ISO Electronic Rating Content or procure a commercial off-the-shelf rating system from a vendor that is a member of the ISO Electronic Rating Content Associate Program.
Below are the key benefits that insurers can gain from ISO Electronic Rating Content enabled using a modern rating engine solution are:
- Premium Accuracy: ISO ERC enables insurers to price risks appropriately and ensure pricing based on prevailing market conditions.
- Speed to Market: Equipped with a modern rating engine, insurers can realize speed-to-market with existing and new product opportunities by automating the creation and maintenance of rate plans.
- Cost Effectiveness: A rating engine that can pre-populate ISO analyzed Electronic Rating Content empowers insurers to focus on their own deviations and company specific features.
- Compliance: ISO ERC enables product offerings to be in compliance with latest ISO Circulars thus ensuring compliant ISO products reach consumers in the marketplace.
Automated Maintenance Feed (AMF) and its benefits
ISO has taken ISO ERC a step further with the new Automated Maintenance Feed (AMF) feature, which enables insurers to import the most recent changes to ISO loss costs and rating algorithms directly into their rating systems. The content also accompanies automated release notes, helping insurers identify the latest changes to rating information and logic with greater efficiency. Rating engine solutions with the capability to fully leverage the digital delivery of ISO's rating content via the ISO Electronic Rating Content (ERC) product can significantly lower costs associated with rating operations.
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.