ISO Risk Analyzer Homeowners is a set of predictive models designed to help insurers classify and segment risks. The environmental module predicts expected losses at a much more refined geographic level than traditional territories. The module also determines expected losses separately by major peril, including wind, fire, lightning, liability, theft and vandalism, hail, water related to weather, water not related to weather, and all other perils for a base risk. In addition, the model can aggregate the by-peril expected losses to an all-perils-combined basis.
“By predicting expected losses at the policy level by peril, the environmental module of ISO Risk Analyzer Homeowners helps insurers evaluate homeowners risks with greater precision and thus enhance accuracy,” said Kevin Thompson, SVP of Insurance Services at ISO. Developed with advanced modeling techniques, the environmental module analyzes the interactive effects of hundreds of variables derived from data from ISO and external sources and provides insurers the flexibility to assess and refine homeowners rating with one set of analytic tools. “This will enable insurers to better classify, segment and underwrite homeowners risks,” added Thompson.
The environmental module is one of several ISO Risk Analyzer Homeowners modules that insurers will be able to use individually or together depending on their analytic objectives, says the company. At this time, more than a dozen insurers are participating in pilot tests to evaluate the environmental module. The other models under development include the rating factors and building characteristics models.
Insurers can integrate the environmental module and future models into their own predictive models or use ISO Risk Analyzer Homeowners as a stand-alone model. To send and receive reports, insurers can choose secure FTP, interactive mainframe delivery or batch order processing.
