ISO has received approval of its filings introducing new ISO Risk Analyzer Homeowners by-peril rating rules in 13 states, with filings pending approval in several other states. The new optional rules provide by-peril rating relativities for key homeowners rating variables.
When used in conjunction with the current ISO Risk Analyzer Homeowners environmental rating rules, insurers can benefit from more in-depth by-peril analysis of the homeowners risks within their book of business.
Both the by-peril rating rules and the combined all-perils environmental rating rules use output of ISO Risk Analyzer Homeowners, a predictive model that develops expected losses at a much more refined geographic level than traditional territories. With this latest enhancement, ISO Risk Analyzer Homeowners now makes available rating relativities by individual peril for several important homeowners rating factors, including Coverage A amount of insurance, deductible, and age of construction. There are nine peril categories: fire, theft and vandalism, lightning, liability, wind, water (non-weather related), water (weather related), hail, and all other perils (excluding hurricane and earthquake).
“The new optional by-peril rating rules offer increased flexibility for insurers that want to look at the effects of perils individually and perform their own by-peril analysis,” says Kevin Thompson, president of ISO Insurance Programs and Analytic Services. “By predicting expected losses at the policy level by peril, ISO Risk Analyzer Homeowners helps insurers evaluate homeowners risks with greater precision and thus enhance accuracy.”
Insurers also have the option of using only the combined all-perils environmental rating rules, which have been available since June 2011.
ISO is filing the by-peril rating rules for insurers to use if they elect to license and adopt them. ISO Risk Analyzer Homeowners is part of the ISO Risk Analyzer suite of predictive modeling tools. Leveraging the data and predictive modeling expertise of ISO and data from external sources, ISO Risk Analyzer Homeowners provides insurers the flexibility to assess and refine homeowners policies with one set of analytic tools.
The suite also includes ISO Risk Analyzer Personal Auto for evaluating personal auto risks and ISO Risk Analyzer Commercial Auto for analyzing two major classes of commercial auto risks: local/intermediate trucks, tractors, and trailers (TTT) and private passenger types (PPT).
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