Visualize: Insights that power innovation

Visualize: Insights that power innovation

Report highlights benefits of ISO Electronic Rating Content™

By Mark Sheehan  |  August 26, 2019

Keeping insurance products up to date with regulatory changes can be a challenge.  Recent research conducted by Celent shows insurers that use Verisk’s ISO Electronic Rating ContentTM (ERCTM) are more likely to be current and spend less time processing changes to ISO insurance policy programs than insurers that use a manual approach.

ISO ERC allows insurers to ingest ISO rating content—loss costs, rules, and forms attachment logic—electronically through XML, simplifying maintenance and updates while giving insurers flexibility to use their own tools and systems.

According to the Celent study, ISO ERC users:

  • spend 63% less work time processing a typical ISO circular
  • can complete such changes with 70% less elapsed time
  • are 33% more likely to be current with their regulatory reporting

ISO monitors the changing regulatory environment and, using industry data, creates rating algorithms, loss cost tables, and coverage forms. When required, ISO submits these loss costs, rules, and forms to state Departments of Insurance, easing the regulatory process.

Regulations change frequently, and ISO communicates these changes through circulars that explain the change, provide details, and provide implementation notes—such as the date the change is effectively approved by the state. While this is a valuable service, it can create a lot of work for insurers, as ISO releases, on average, more than 75 circulars a week.

Celent sought to understand how ISO ERC insurers differ from non-ERC insurers in terms of their level of ISO currency, their reliance on ISO, and the frequency of making ISO changes. They surveyed a cross section and found that, in general, handling and tracking circulars takes ISO ERC insurers half the time it takes non-ERC insurers.

On average, Celent found, insurers that use ISO ERC take 32% less work time to analyze and create the changes. The main reason cited for this time savings is that they don’t need to spend time interpreting the circular. According to Celent, ISO ERC insurers take 75% less time interpreting circulars than non-ERC insurers because ISO ERC delivers the interpretation of the circular change electronically.

IT also doesn’t need to spend much time sizing the change unless it is a complex one; even then, the IT time required is significantly lower for ISO ERC insurers, Celent found.

These time savings free ISO ERC insurers to spend more time analyzing the market impact of the changes and strategizing about pricing.

Mark Sheehan is vice president and head of the ISO Rating Solutions division. You can contact him at