ISO Expands Its Predictive Analytics Offerings for Commercial Lines

ISO, a member of the Verisk Insurance Solutions group at Verisk Analytics, announced the launch of the new ISO Risk Analyzer Businessowners Environmental Module and the availability of the newly enhanced version of the ISO Risk Analyzer Commercial Auto Environmental Module. Both offer increased accuracy in developing appropriate premiums for insured risks.

The modules can help insurers improve the accuracy and competitiveness of their rating plans and better understand loss exposure for their commercial books of business at a more refined level of geography, such as ZIP code or census block group. The environmental modules use ISO’s data resources and a comprehensive set of third-party location-specific data.

The environmental module of ISO Risk Analyzer Businessowners examines information related to the geographic attributes of a risk’s location to provide expected loss costs on a by-peril basis (fire and lightning, non-hurricane wind and hail, theft and vandalism, water and other property perils, and liability). The module also incorporates the effects of relationships among different geographic data elements, such as weather and local concentrations of businesses.

“The area surrounding the business can have a markedly different effect on losses from different perils,” said Beth Fitzgerald, senior vice president of ISO’s Insurance Programs and Analytic Services Division. “Two businesses of similar type, size, and construction located in different areas of the same traditional territory can be exposed to different hazards. For example, differences in elevation can affect loss propensity due to the wind and freezing perils. By examining how specific environmental variables can affect each peril group’s contribution to the total loss cost, the new module gives insurers a more precise way to analyze loss exposure and identify the key drivers of loss costs. That enables them to develop premiums more appropriate to individual businesses.”

The newly enhanced environmental module continues to enable insurers to employ more precision when examining their commercial auto risks. The updated offering uses the latest commercial auto data available and a broader collection of external data, including business census data and road and traffic data. Insurers who currently use the ISO Risk Analyzer Commercial Auto Environmental Module will automatically be eligible for access to the enhanced module.

The module continues to provide expected loss costs at the address level for two major classes of commercial auto business: local/intermediate trucks, tractors, and trailers and private passenger types, and by major coverage, including bodily injury, property damage, collision, other than collision, and combined single-limit liability.

“More and more commercial insurers are realizing the need to improve their geographic segmentation and refine their pricing, but they may lack sufficient data, analytic tools or in-house expertise,” added Douglas Wing, assistant vice president of ISO’s Insurance Programs and Analytic Services Division.

ISO Risk Analyzer Businessowners and ISO Risk Analyzer Commercial Auto are part of the ISO Risk Analyzer suite of predictive analytics tools, which also includes models for personal auto and homeowners insurance. For more information on the ISO Risk Analyzer suite, visit www.iso.com/riskanalyzer.

Source: ISO