Visualize: Insights that power innovation

Visualize: Insights that power innovation

Precision and prediction: How predictive models can improve vehicle rating

By Jimmy Engström, Ralph Dweck  |  December 1, 2020

Variety may be the spice of life, but when it comes to auto insurance risks, a greater variety of vehicle features can present pricing challenges. Dozens of vehicle-specific variables influence a private passenger or commercial vehicle’s propensity for loss and those variables fluctuate not only between vehicle makes, but within a vehicle series, as well.

ISO Risk Analyzer® was built to help address this challenge. Combining Verisk’s sophisticated predictive modeling with an extensive catalog of vehicle characteristics and loss data, ISO Risk Analyzer Vehicle Symbols produce ratings relativities that account for interactions between vehicle features and their effect on future loss propensity by coverage-specific risks of loss. The result is a more specific rating structure for both personal and commercial vehicles.

And now, these Symbols are providing even greater rating refinement.

What’s new

The newest generation of ISO Risk Analyzer Personal Auto Symbols are now available, covering both Physical Damage and Liability. These advanced Symbols provide insurers even greater refinement when classifying auto risks. Advanced modeling techniques coupled with robust vehicle data have enabled our next generation offering to increase the number of symbols by over 100 percent of the previous generation. And for the first time, ISO Risk Analyzer Personal Auto will include a California-specific set of Symbols to account for the state’s unique auto rating plan.

The enhancements to the ISO Risk Analyzer Commercial Auto include the addition of Liability Symbols that stratify current rating estimates by 85 percent. Informed by vehicle size, shape, engine, safety features, and performance, ISO Risk Analyzer Commercial Auto returns a VIN-specific rating factor to use alongside traditional loss costs in order to more effectively underwrite and price policies.

Collectively, the enhancements to ISO Risk Analyzer Symbols will help insurers in the commercial, personal, and specialty auto markets, like nonstandard, better price vehicle risks. By leveraging Symbols over an extensive range of vehicles—from passenger cars and SUVs to extra heavy truck-tractors—you can now better identify levels of risk within a vehicle series based on the historical losses and, crucially, the vehicle’s unique attributes. This can help provide you with unmatched pricing intelligence in these competitive markets.

If you would like to know more about ISO Risk Analyzer and the modules included across four lines of business, including homeowners and businessowners, please visit www.verisk.com/ISORiskAnalyzer.


Jimmy Engstrom is director for ISO personal lines analytics products at Verisk. You can contact him at Jimmy.Engstrom@verisk.com.

Ralph Dweck is senior actuarial consultant for ISO commercial lines at Verisk. You can contact him at Ralph.Dweck@verisk.com.