New ISO Reserving Tool Provides Customized Analytics for Estimating and Benchmarking Insurers' Reserves

January 1, 2011 / 2 min read

JERSEY CITY, N.J., Dec. 14, 2005— ISO has developed a loss-reserving tool that draws on large detailed ISO databases to enable insurers to set loss reserves more accurately.

Insurers can use the results of the new ISO tool to benchmark reserves against ISO direct (before reinsurance) data and provide ranges around their own reserves. The tool is also informative for insurers that have begun writing or are considering entering new business segments.

The new loss-reserving tool mirrors an insurer's book of business for each line of insurance to produce two customized aggregate loss development data reports — the Mix of Business Report and the Segment Report.

The Mix of Business Report uses ISO aggregate data that is customized for the insurer's unique mix of business to generate multiple estimates of the carrier's loss reserves. After the insurer selects its best estimate of reserves, the tool provides several confidence intervals, or ranges of results, around the best estimate.

The Segment Report provides an analysis of ISO aggregate data for the segments — by state, coverage or class groupings — that the insurer has selected.

The reports provide a reliable analytical tool for insurers to estimate the reserves they will need to pay future claims and to determine the ultimate amount and timing of losses for new business segments. Insurers can also use the tool to benchmark reserves against ISO data for senior management, rating agencies, investors and regulators.

"Our new loss-reserving tool, with analytics applied to an insurer's customized mix of business segments, offers insurers a significant knowledge advantage," said John J. Kollar, ISO vice president of consulting and research. "ISO has one of the world's largest private statistical databases, with more than 10 billion detailed records of premium and loss transactions. The depth and range of ISO's industrywide aggregate loss data provide a solid foundation for insurers to augment their own loss experience and develop credible loss reserve projections," Kollar added.

Loss reserves are provisions insurers make to pay claims that have not been settled (fully paid). The loss-reserving tool enables insurers to augment their own experience with ISO experience for the same lines of insurance, states, coverages, classes and other variables.

For more information on the ISO loss-reserving tool, contact Daniel Crifo at 201-469-2337 or e-mail dcrifo@iso.com.

About ISO
ISO is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government and human resources. Clients use ISO's databases and services to classify and evaluate a variety of risks and detect potential fraud. In the U.S. and around the world, ISO's services help customers protect people, property and financial assets.

Release: Immediate

Contacts:
Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500
gbarone@mww.com / ehelton@mww.com