With the launch of the environmental module of ISO Risk Analyzer Personal Auto, ISO expanded its offering of analytic decision-support tools in the personal auto insurance line.
As a predictive model to help insurers classify, segment, and price personal auto risks, the analytic tool can examine more than 1,200 indicators and predict expected losses at the policy level by major coverage.
The environmental module of the model examines the interactive effects of the traffic environment, including the number and types of businesses in an area, traffic density, driving patterns, and public transportation usage; the natural environment, such as the weather and topographical characteristics of an area; and other factors, such as claim frequency and severity trends by state.
The environmental module is one of several modules that insurers can use individually or together, depending on their analytic objectives. At this time, 17 insurers are participating in pilot tests to evaluate the environmental module. Other modules under development include vehicle and driver-history modules.
To support the new personal auto model, ISO began the regulatory filing process for an optional personal auto rating plan and expects over the coming months to complete the process several states at a time.
Insurers can integrate the environmental module and future modules into their own predictive models or use ISO Risk Analyzer Personal Auto as a stand-alone model. To send and receive reports, insurers can choose web delivery, secure FTP, interactive mainframe delivery, or batch order processing.
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