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Spend less time on regulatory updates, more time pursuing profitable growth

Insurers want to grow profitably, but the regulated nature of the business requires many to devote an inordinate amount of time and money to keep current with regulatory changes—resources that could be spent identifying and exploiting new opportunities.

It doesn’t have to be that way. A recent Celent study suggests insurers that process regulatory changes manually could dramatically reduce the cost of staying current with ISO insurance policy programs by using ISO Electronic Rating ContentTM (ERCTM), thus freeing up resources to focus on more revenue-generating activities. 


Regulations can change frequently, and ISO communicates many of these as well as other changes through circulars that provide further details and implementation notes. While this is a valuable service, it often creates considerable work for many insurers, because ISO releases, on average, more than 75 circulars every week.

ISO ERCTM allows insurers to ingest ISO rating content—loss costs, rules, and forms attachment logic—electronically through XML, simplifying maintenance and update while giving insurers flexibility to use their own tools and systems or those of their vendor partners.

The study found that insurers using ISO ERC on average spend 63 percent less work time processing a typical ISO circular and can process the changes with an average of 70 percent less elapsed time from when the circular is received.

The most common reason for this time savings, Celent found, is that ISO ERC insurers typically don’t need to spend as much time “interpreting” the circular. ISO ERC insurers on average take 75 percent less time interpreting circulars than many traditional insurers. That’s because ISO ERC delivers the interpretation of the rating content electronically directly to carriers. This also reduces the insurer’s need for IT involvement. IT doesn’t have to spend time sizing the change unless it’s a complex one–even then, the amount of IT effort is significantly lower for ISO ERC insurers.

This allows ERC insurers to spend more time analyzing the market impact of the changes and strategizing about pricing and the effect on rating. In fact, the ISO ERC insurers that Celent interviewed were all using predictive analytics, while only one non-ERC insurer surveyed had taken this approach.

Celent found that the traditional insurers it surveyed are less likely to do any market or competitor analysis.

“The use of ERC appears to have the effect of allowing resources to concentrate on higher value-added activities,” Celent reported.

For information about how ERC can help you stay current, please visit our web page.

Mark Sheehan

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

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