NEW YORK, May 27, 1997 — The American Insurance Association (AIA) and Insurance Services Office, Inc. (ISO) have reached an understanding for ISO to acquire the operations of American Insurance Services Group, Inc. (AISG), an AIA affiliate.
The transaction is subject to ISO's satisfactory conclusion of a due-diligence analysis of AISG's operations and assets, broad discussions with AISG's subscribers, negotiation and execution of a definitive agreement with AISG, and approval by the AISG board of directors. Other specific terms of the transaction were not disclosed.
Headquartered in New York, AISG and its 125 employees provide a broad array of property and liability claims information and technical advisory services to more than 3,800 companies — insurers, self-insureds, third-party administrators and state workers' compensation funds.
AISG's activities comprise:
As part of the due-diligence analysis, ISO will review with AISG subscribers how ISO can effectively apply its strengths to enhance AISG products and services.
"The acquisition is a critical first step in the industry's effort to rationalize responsibilities, build strengths in core competencies, and provide the greatest consumer benefits at the lowest cost," said Robert E. Vagley, president and chief executive officer of AIA. "AIA will continue to concentrate on our insurance-industry advocacy mission — our core activity. The operation of a data-repository company such as AISG is more closely aligned with ISO's data-management and information activities."
"Combining AISG's strengths with ISO's core competencies — world-class data-management and analytical skills — will strengthen the industry's ability to maximize the value of AISG's data bases and technical advisory services," said Fred R. Marcon, ISO's chairman, president and chief executive officer. "The AISG acquisition also will bring ISO foursquare into serving the claims-management function, and so enable us to expedite the prompt handling of meritorious claims and develop innovative solutions to insurance fraud, which costs the health, property/casualty and life insurance industries billions of dollars each year. Broadening our activities into the claims area will advance our strategy to be the premier source of property/casualty insurance information."
New York-based ISO provides statistical information and actuarial analyses; drafts standardized policy language; and offers a variety of site-specific insurance rating and underwriting services. The AIA, headquartered in Washington, is a trade association of property/casualty insurers.
"AISG has an established presence in insurers' claims, loss control, and premium audit departments, and in the self-insured, third-party-administrator and disability markets," noted Marcon. "We at ISO are excited about combining fresh innovations in AISG's current services with ISO's existing product offering to create enhanced business solutions that address those customers' needs."
Added Vagley: "Under AIA, AISG has provided the industry valuable services. Those services will be further improved when combined with ISO's data collection, information distribution, customer service, data-base technology and underwriting competencies."
Daniel Zielinski (AIA)