ISO Rating Enablement in Core System Vendors

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6 April 2015
Karlyn Carnahan


Celent surveyed 20 vendors that provide policy administration or stand-alone rating engines to understand the answers to these questions.

Maintaining rates, rules, and forms is a complex and labor-intensive process within an insurance carrier. Most commercial line insurance carriers use ISO as a resource to help them stay on top of loss cost trends, new product forms, and regulatory changes. Over the last few years, ISO has successfully launched a number of new electronic services that can significantly speed up the process of interpreting and taking ISO changes.

The most significant new option is the ISO Electronic Rating Content (ERC). With ERC, ISO offers its rating content in an electronic format. This service has many features — all of which are intended to streamline the process for carriers, allowing them to take revisions faster. Carriers can subscribe to ISO ERC, but to get full value, their policy administration or rating system needs to be able to absorb the XML stream or Excel files.

Will this be the wave of the future? Are vendors moving toward the ISO ERC product? Can carriers rely on their vendors’ investments in facilitating ERC?

Key Findings

Although ISO ERC is still a relatively new product in the industry, vendors report growing interest in ISO ERC from their customer base. Utilization of staff at a vendor site for analysis and interpretation is still a very common capability, and those who utilize ERC believe it gives them a competitive advantage. They also predict that usage of this option will increase. For most vendors, enablement of ISO ERC is seen as a competitive advantage today, and over time is expected to become table stakes.

“Whether a vendor believes the optimal way to support ISO is through ERC or through an internal team seems to be a matter of philosophy,” says Karlyn Carnahan, a research director with Celent’s Insurance practice and author of the report. “However, those who have enabled ISO ERC do report significant benefits. Vendors who have not yet enabled ERC either are committed to their current model, or have a sense of urgency to move to ERC and are planning implementations within the year.”

This 28-page report contains 15 charts.

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Insight details

Property & Casualty Insurance
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Insurance, >>Property / Casualty Insurance
Insight Format
Geographic Focus
North America