JERSEY CITY, N.J., January 28, 2015 — ISO announced today the availability of its latest predictive analytic offering to help insurers further increase accuracy in risk selection and pricing for small business risks. The new offering, the ISO Risk Analyzer® Businessowners By-Peril Rating Factors Module, complements its environmental counterpart by introducing by-peril rating factors for businessowners property. Together, the two modules provide insurers with a highly detailed look at how major perils affect loss potential. ISO is a Verisk Analytics (Nasdaq:VRSK) business.
“With the small business sector growing steadily and competition in the personal lines intensifying, many insurers are looking to small commercial risks as an area for potential profitable growth,” said David Cummings, senior vice president, ISO Insurance Programs and Analytic Services. “Some have begun to extend businessowners program eligibility to more types of risks as well as to larger risks, while others are entering the small commercial market for the first time.”
“Because traditional rating methods may not sufficiently capture the variability in risk, the use of predictive analytics to develop by-peril rating plans for businessowners has the potential to improve loss ratios and grow market share as it did for homeowners,” added Cummings. “In fact, over the past five years, we’ve seen early adopters of homeowners by-peril plans gain an additional 6 percent of market share while maintaining loss ratios 6.6 points lower than competitors not using by-peril rating.”
When it comes to predictive analytics for businessowners, the ISO Risk Analyzer Businessowners predictive modules can help solve the data quality and credibility issues many insurers struggle with.
“Insurance carriers can readily use the ISO Risk Analyzer output to potentially jump-start their risk-based pricing efforts or enhance those already in use,” said Douglas K. Wing, assistant vice president, Analytic Products, ISO.
“Many of our customers using the businessowners environmental module have already identified significant lift in their book of business and are now looking to incorporate the new rating factors module for additional improvement,” added Wing. “As many insurers move toward using online distribution channels for small commercial risks, increased accuracy in rating and pricing segmentation will likely be critical for success.”
ISO Risk Analyzer Businessowners is part of the ISO Risk Analyzer suite of predictive analytics solutions, which also includes models for personal auto, commercial auto, and homeowners insurance. For more information on the ISO Risk Analyzer suite, visit www.verisk.com/riskanalyzer.
Since 1971, ISO has been a leading source of information about property/casualty insurance risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides statistical, actuarial, underwriting, and claims information and analytics; compliance and fraud identification tools; policy language; information about specific locations; and technical services. ISO serves insurers, reinsurers, agents and brokers, insurance regulators, risk managers, and other participants in the property/casualty insurance marketplace. ISO is a Verisk Analytics (Nasdaq:VRSK) business. For more information, visit www.verisk.com.