Verisk, a leading global data analytics and technology provider, has launched its ISO Experience Index to assist the insurance industry in quickly assessing changes in risk patterns and the cost of insuring risk.
Verisk, known for its comprehensive data solutions and innovative technology, aims to modernise risk pattern analysis with this new tool.
The launch of the ISO Experience Index is in response to the insurance industry’s need to address increasing volatility and scale of loss patterns.
In 2023, the industry reported $21.2bn in underwriting losses, marking the highest loss ratio levels in nearly two decades. This innovative index provides insurers with a responsive and up-to-date indicator of observed underwriting experience.
Verisk specialises in providing advanced data analytics and technology solutions across various industries, including insurance. The company’s mission is to empower clients to make informed decisions through cutting-edge tools and insights.
The ISO Experience Index is designed to offer frequent and responsive insights, enabling insurers to accelerate pricing decisions and confidently evaluate market conditions.
This benchmarking tool provides quarterly releases and streamlined data adjustments, ensuring more frequent updates compared to traditional loss cost reviews. The index maintains consistent methodology across different states, supporting uniformity in measurement.
In addition to providing real-time insights, the ISO Experience Index highlights recent trends. For instance, the fourth quarter of 2023 saw the countrywide Experience Index for Homeowners rise by 2.5% compared to the previous quarter, reversing the decline observed in the third quarter.
The index is currently 3.4% higher than at the end of 2022 and 24.4% above the level at the end of 2021.
Saurabh Khemka, co-president of underwriting solutions at Verisk, stated, “Insurance plays a pivotal role in society and the industry has faced harsh market conditions over the last few years. Our new Experience Index is one more way we empower our clients to react quickly and effectively to changing market conditions, ultimately saving them time, effort and resources while driving profitability. Insurers can now assess risk patterns and formulate responsive strategies with increased confidence.”
“This index provides insurers with timely indicators to prioritize in-depth analysis, resource allocation, and pricing activities. It also offers a comprehensive view of changing conditions in various geographic markets, enabling carriers to make informed decisions.”
The ISO Experience Index also offers a multi-year view, revealing a 17.2% increase in pure premiums for the fourth quarter of 2023 compared to the preceding five-year period. This longer-term perspective provides numerical context to issues such as severe convective storms, which are increasingly relevant to property insurers.
Available today on existing product delivery platforms for eligible subscribers of Verisk’s Core Lines Services, the ISO Experience Index initially provides loss level metrics by state for Homeowners. Expansion to other key lines of business is expected soon.
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