NEW YORK, January 19, 2000 – The Government of Israel has awarded Insurance Services Office, Inc. (ISO) a three-year, $5.45 million contract to establish and operate the country's insurance data bank for personal and commercial automobile liability insurance.
The assignment stems from Israel's new automobile insurance law, which reforms the auto insurance market and makes it more competitive among the nation's approximately 30 insurance companies. The law becomes effective January 1, 2001.
As part of Israel's reform of compulsory personal and commercial automobile insurance market, the country is replacing its existing uniform tariff system with a structure based on additional rating elements and more detailed loss experience. The new law mandates insurers to provide auto loss information to the data bank that ISO will set up and operate under contract for the Capital Markets Division of the Ministry of Finance & Treasury, Israel's regulator of insurance. The Israeli $1 billion liability auto insurance market covers some 1.2 million passenger autos and 500,000 commercial vehicles.
The data bank will collect and verify statistical data from insurers, create an auto risk-classification and statistical plan to identify auto risks, and provide insurers and regulators with prospective loss costs – estimates of future claims payments.
"Our decision to award the data-bank contract to ISO is a natural outgrowth of the new insurance reforms," said a spokesman for the Ministry of Finance. "ISO's proven capabilities in actuarial sciences and data management, based on years of similar experience, give us confidence in the accuracy and utility of the information the data bank will provide insurers and the government."
"We look forward to helping make the transition to the new competitive insurance environment as smooth as possible for insurers, regulators, and motorists," said LeRoy A. Boison, ISO's senior vice president – insurance services, who will be responsible for the project. "The data bank will provide a solid information infrastructure for fair and accurate insurance pricing."
The contract awarded to New York-based ISO is for three years from the time the data bank becomes operational. The Ministry of Finance and Treasury has an option to extend the contract for an additional five years.
ISO will open an office in Tel Aviv later this month, and work with a local vendor, Mertens-Hoffman Management Consulting LTD, in setting up the data bank and collecting statistical information from insurers.
Insurance Services Office, Inc. provides statistical, actuarial, underwriting, and claims information and analyses; consulting and technical services; policy language; and information about specific locations. ISO offers services for 17 lines of property/casualty insurance. In the United States and around the world, ISO serves more than 2,900 insurers and reinsurers, as well as agents, brokers, self-insureds, risk managers, insurance regulators, and other government agencies.