Rating Erc

Monday Web Seminar SeriesMonday Web Seminar Series

T H E S C I E N C E O F R I S K SM

New Insurance Program Algorithms

for Efficient Implementation

Policy Statement

The policy of Verisk Analytics and subsidiary companies,

including ISO, is to comply in all respects with federal and

state antitrust laws. With this in mind, we want to mention

that during all seminars held under our auspices, the

antitrust laws prohibit discussion of certain topics. Because


antitrust laws prohibit discussion of certain topics. Because

we want to avoid even the appearance of an antitrust

violation, we go beyond the letter of the law, and we will

not discuss any matter that violates the spirit of the

antitrust laws or could be perceived as doing so.

A copy of our Policy Statement on Discussion at Meetings

can be found at www.iso.com/statement.

Today’s Presentation

Todd MeyerSenior Sales Consultant

ISO Rating Solutions


• Analyze the ISO content

• Design the ISO content implementation

• Implement the ISO content

• Test the ISO content

Process of an Update



• Customize for insurer-specific deviations

Analysis

• Determination of each circular– No change required

• Example: Wording changes on the form

– Algorithm changes• Algorithm creation

• Check in/out of source control



– Loss cost updates• Creation of Excel spreadsheets


– Form changes• Form edition date

• Modifications within user interface

• New form creation

• Updating or changing conditional logic

Implementation

• Infrastructure modifications– Mapping

– Constraint data

– Pricing table updates

• UI modifications


• UI modifications– Required elements

– Flow and validation

– Conditional data capture

• Algorithm modifications– Algorithm deviations

Alternative for Staying Current

• Analyze the ISO content

• Design the implementation

• Implement the ISO content



Test the ISO content

• Customize for insurer-specific deviations

ISO Rating Product Comparison

Functionality

ISO

Insurance

Manuals

ISO

IntegRater™

ISO Electronic

Rating Content

ISO Rating

Service®

Narrative description of line of business rules and advisory loss

costs (PDF, MS-Word, or paper-based)

√

Formatted file of advisory loss costs √ √ √

Formatted file of valid coverage limits √ √ √

Formatted file of valid deductibles √ √ √

Formatted file of valid additional rating data, such as

classification codes, territories, legal entities, etc.

√ √ √


classification codes, territories, legal entities, etc.

Formatted file of valid form numbers and edition dates √ √

Technical specifications for calculating policy and coverage

premiums

√ √

Technical specifications for forms attachment logic √ √

Technical specifications for stat code assignment √ √

Technical specifications for validation rules √ √

Fully automated code for calculating policy and coverage

premiums

√

Fully automated code for forms attachment logic √

Fully automated code for stat code assignment √

Fully automated code for validation rules √

Potential Uses of Content

• Direct upload of loss costs to policy

administration system (PAS)

• Understand how a particular coverage is

rated for purposes of analysis


rated for purposes of analysis

• Use data in your companies modeling tools

• Provide your actuaries a file for analysis

• Use key data to build user interface

What Is ISO Electronic Rating Content?

• ISO Electronic Rating Content is your key to

building and maintaining ISO lines of business by

providing implementation-level details and

automated files with key rating data for upload to


automated files with key rating data for upload to

your PAS.

If you subscribe to ISO for participation, this is the

jump start you need…

ISO Electronic Rating Content

• Documents ISO-interpreted advisory loss costs, rules, forms logic, and stat code assignment

• Delivers automated ISO updates via ISOnet

• Works with any PAS


Major Deliverables

• Formatted file (MS-Excel or XML) available for upload to PAS– Required tables and their relationships, such as:

• Parent-child relationships

• Fields and field sizes

• Keys

– Valid data entry fields, such as:• Limits

• Deductibles


• Deductibles

– Valid system tables and their entries, such as:• Advisory loss costs

• Increased limits factors

• Classification codes/descriptions

• Technical specifications– Premium calculations

– Forms attachment logic

– Stat code assignment logic (ISO full stat plan)

– Validation messages

• Sample test case for each LOB/state

ISO LOB

State

Delivery Model

= Content from

ISO State Manual


ISO LOB

Countrywide

= Content from

ISO Multi-State Manual

What Is ISO Rating Service?

• ISO Rating Service:

– Powerful rating engine

– Tool set

– ISO-defined rating content

– Ongoing maintenance


– Ongoing maintenance

ISO Rating Service

• A unified rating solution for ISO programs

• Incorporates ISO-interpreted advisory loss costs, rules, forms logic, and stat code assignment

• Supports company-customized rating deviations and state exceptions


and state exceptions

• Works with any industry or in-house PAS

• Provides rate management reporting utilities

• Streamlined delivery of ISO content updates via ISOnet

• Delivers automated ISO updates

Rating Documentation Artifacts

• Some of the tools provided with ISO Electronic Rating Content and ISO Rating Service:

– Ratebook Reports containing ISO-defined valid values, loss costs, and forms assignment rules

– Algorithm files containing ISO-defined order of


– Algorithm files containing ISO-defined order of calculations, rounding rules, statistical code assignment, forms attachment, logic and edits for forms and coverages

Rates and Valid Values Electronically• Need to know the ISO loss costs for a specific ratebook release?

– Create a custom file with your company’s exceptions for development

– Create a file for use with your company’s modeling tools

– Create a file for your actuaries to use as an analysis tool


Loss costs as defined

by ISO from CLM

Key Rating Data in Electronic Format• Need a list of ISO territories by city for use in:

– Building your company’s user interface

– Creating a custom file with your company’s exceptions for development

• Before ISO Electronic Rating Content, business resources had to create these files manually using the Commercial Lines Manual!


Cities and territories as

defined by ISO in CLM

ISO-Defined Rating Calculations

• Need to know how ISO rating is occurring for coverages in order to:– Confirm that your rating truly does follow ISO

– Understand how a particular coverage is rated for purposes of analysis

• Algorithm files containing rating rules can be downloaded in seconds for each ratebook release


Each step of

calculation is shown

Rounding rules

Forms and Attachment Rules

• Need to know the form attachment rules for use in:– Building your user interface

– Understanding the conditions in which ISO attaches forms

• The same algorithm files containing rating rules also contain form attachment logic

Forms designated as optional,

conditional, or mandatory


Forms attachment logic for each

conditional endorsement

Statistical Code Assignment

• Need to know the stat assignment rules for use in:– Bureau reporting

– Understanding the stat conditions for premium reporting

• The same algorithm files containing rating rules also contain stat code assignment logic


Feedback

• Send feedback to:– [email protected]

• Next event:

– Monday, March 12, 2:00 p.m. Eastern time


– Monday, March 12, 2:00 p.m. Eastern time

– Commercial Telematics: What Are You Missing?

• Visit www.verisk.com/ws to register

Rating Erc

Documents

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