Verisk Launches First-of-its-Kind Insurance Index to Better Inform Pricing Decisions
July 09 2024 - 9:25AM
The insurance industry exceeded loss ratio levels that have not
been seen in nearly 20 years, with an estimated $21.2 billion
reported in underwriting losses in 2023. To help insurers, Verisk
(Nasdaq: VRSK), a leading global data analytics and technology
provider, has launched its ISO Experience Index, an innovative tool
designed to modernize how actuaries in the insurance industry
analyze risk patterns. The ISO Experience Index addresses the
increasing volatility and scale of loss patterns in the industry,
offering a responsive and up-to-date indicator of observed
underwriting experience.
"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," said Saurabh Khemka, co-president of underwriting
solutions at Verisk. "Insurers can now assess risk patterns and
formulate responsive strategies with increased confidence."
As a benchmarking tool for insurers, ISO Experience Index
provides users with frequent and responsive insights to help
accelerate pricing decisions and bolster confidence in the
evaluation of market conditions.
Verisk’s new index:
- Offers quarterly
releases and streamlined data adjustments, with more frequent
updates compared to traditional loss cost reviews.
- Is directly tied to
specific points in time and maintains consistent methodology across
different states, to support uniformity in measurement.
- Provides carriers
with current information and contextual insights beyond the annual
review cycles.
Revolutionizing risk management through responsive
insights, in real time
Recent trends seen in the ISO Experience Index for Homeowners
underscore the importance of this tool, demonstrating the
fluctuation of loss levels throughout different markets. The
countrywide Experience Index rose 2.5% in the fourth quarter of
2023 compared to the previous quarter, reversing course from the
decline observed in the third quarter. The index remains 3.4%
higher than the mark at the end of 2022, and 24.4% above the level
at the end of 2021.
Khemka added, "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."
Beyond its responsiveness to the latest data trends, the tool
also helps illuminate longer-term patterns with its multi-year
view. By using the rolling five-year basis of data, the index
reveals a 17.2% increase in pure premiums for the fourth quarter of
2023, compared to the preceding five-year period. This provides
numerical context to issues such as severe convective storms that
have become increasingly relevant to property insurers and present
a new operating environment.
The ISO Experience Index is available today on existing product
delivery platforms for eligible subscribers of Verisk's Core Lines
Services. The initial launch is poised to introduce loss level
metrics by state for Homeowners, with expansion expected soon to
follow for other key lines of business.
About Verisk Verisk (Nasdaq: VRSK) is a
leading strategic data analytics and technology partner to the
global insurance industry. It empowers clients to strengthen
operating efficiency, improve underwriting and claims outcomes,
combat fraud and make informed decisions about global risks,
including climate change, extreme events, sustainability and
political issues. Through advanced data analytics, software,
scientific research and deep industry knowledge, Verisk helps build
global resilience for individuals, communities and businesses. With
teams across more than 20 countries, Verisk consistently earns
certification by Great Place to Work and fosters
an inclusive culture where all team members feel they
belong. For more, visit Verisk.com and the Verisk
Newsroom.
Morgan Hurley
Verisk
551-655-7858
morgan.hurley@verisk.com
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