ISO Electronic Rating Content, when combined with the right technology, can enable carriers to truly benefit from speed-to-market with ISO changes, lower costs and reduce premium leakage.
In our previous two articles on this topic, we’ve laid out the reasons insurers need to incorporate ISO Electronic Rating Content (ERC) to run their business more efficiently, and how utilizing a rating engine that can integrate with ISO ERC can help realize gains in efficiency, as well as save time and money.
If your organization has concluded that a modern rating engine which supports ISO Electronic Rating Content is for you, let’s end by examining some technology considerations to keep in mind. You will have to determine if you want a cloud or on-premise deployment. While cloud deployments can provide significant speed-to-market and cost benefits, be sure to evaluate if the vendor meets security, availability and privacy requirements.
You also must consider whether the solution gives you agility to respond to business needs. Vendor solutions that provide easy-to-use configuration capabilities can help you gain or regain control over the ability to easily create and modify company-specific deviations from ISO, and at the same time help you keep current with latest ISO releases.
Your new ISO rating logic should be able to be accessed by any of your upstream agent portal and downstream administration systems to provide rate guidance. Be sure to evaluate whether the solution is “stateless” and designed to provide rates (and not store quote data) and that part of the rating logic—especially ISO-provided implementation specifications—is not missing or maybe not hard-wired into the application screens. This way, you will avoid having to maintain data in multiple systems.
Additionally, while some rating engine deployments with ISO ERC may be out-of-the-box, be sure to assess whether your vendor can scale to support your unique needs, especially when it relates to integrating the rating solution with other systems.
Finally, let’s take a look at a hypothetical example where a modern rating engine that integrates with ISO ERC can bring practical and measurable benefits to your organization. Let’s say you are a carrier with a legacy rating engine that is becoming insufficient to meet new operating needs, including effective utilization of ISO advisory loss costs. This system for updating ISO rates may also be largely manual, and the sheer volume of ISO advisory rate circulars can be overwhelming for the existing processes.
Now, if you relied on ISO for commercial property and in 2009, when ISO introduced changes in conjunction with Limit of Insurance (LOI)—for example, new occupancy/construction relativities and specialty commercial lines streamlining—you probably had a large systems project at hand to take advantage of these ISO changes. And similarly, as we look forward, ISO is introducing a new Commercial Auto Optional Class Plan. With a modern rating engine that integrates ISO ERC, your organization can stay current on both simple and complex ISO updates while reducing overhead. Automating your ISO processes can result in considerable savings, reduce premium leakage, ensure regulatory compliance and improve speed-to-market over manual methods. Your business and IT staff will be freed from tedious, manual work involving analyzing, interpreting, modifying, specifying and making system changes.
In addition, you can also empower business analysts with the ability to efficiently and effectively layer your company-specific requirements on top of the base advisory rates, for competitive offerings in the market.ISO Electronic Rating Content, when combined with the right technology, can enable carriers to truly benefit from speed-to-market with ISO changes, lower costs and reduce premium leakage. Keeping mind the business and technology solutions we’ve discussed will ensure you can get the maximum benefit out of a new solution.