Keeping ISO rating data current is a complex and labor-intensive process for many insurance carriers. To react quickly and appropriately to market opportunities with ISO rating content updates, as well as regulatory changes, carriers need to look for solutions that streamline this process - enhancing their go-to-market strategies. If you are actively seeking to modernize and integrate commercial lines rating with your existing core systems and extend the ability to digitally access rate-quote-bind capabilities for agents and brokers, look to the iFoundry Rating Engine. iFoundry is a modern rating engine that fully leverages the digital delivery of ISO's rating content via the ISO Electronic Rating Content (ERC) product. With ISO ERC and iFoundry, insurers are able to lower costs associated with rating operations by significantly reducing the time and effort needed to analyze and implement ISO updates to advisory loss costs and rules. Together, the ValueMomentum and ISO ERC offerings help companies automate the management of ISO rate plans along with their company deviations.

1. 11
INSURERS CAN NOW UPDATE ISO RATING
CONTENT DIGITALLY
Thu, Nov 3, 2016 at 2-3 PM EST
Mark D. Sheehan
AVP, ISO Rating Solutions
Verisk
Karlyn T. Carnahan
Research Director
Celent
Anand Rajaraman
Director, Product Management
ValueMomentum

2. © CELENT
Karlyn Carnahan, CPCU
Research Director, Celent
kcarnahan@celent.com
415.720.8753
NOVEMBER 3, 2016
INSURERS CAN NOW UPDATE ISO RATING CONTENT
DIGITALLY

3. 3© CELENT
• Global business and IT strategy
research
• Ongoing advisory services
• Vertically-oriented consulting
• Staffed by industry experts – 15 FTEs
devoted to insurance
• A division of Oliver Wyman – global
financial services consultancy with
1,400 consultants, offices in
40 countries
About Celent
“It's now common practice to use social media for
investigating suspect claims,” says Craig Beattie, Celent
Senior Analyst. “One possibility would be to use the
information to create a social networking score. This could
help insurers gauge risk, just as they use credit scores.”
If you get 70%, 80%, 90% of all the cars on the road being
driverless, the need for insurance goes way down because
the number of accidents go way down. Premiums could fall
80%-90%. [resulting in] substantial savings for the
consumer.” Donald Light, Research Director, Celent
“Collaboration is a megatrend, a disruptive technology that
is beginning to color everything that an insurance company
does, whether on claims process, estimation, loss control
and other areas.” Karlyn Carnahan, Research Director,
Celent

4. 4
0% 20% 40% 60% 80% 100%
Growth
Efficiency
Diversification
Innovation
Cost reduction
Regulatory
Competitive Parity
Significant Moderate
What is Driving IT Plans And Budgets In 2016?

5. 5
Growth Options
Product/UW Distribution
AcquisitionBranding

6. 6© CELENT
Importance of Strategic Options to Carriers
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
Service Channels Product
Differentiation
Underwriting Low Costs

7. 7© CELENT
What Is The Most Important Factor to Agents When It Comes To Choosing Where To Place
Business?
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Instant issue
Fast delivery of policy documents
Online application submission
Quick quote
UW Relationships
Fast underwriting decision
Competitive Price
Competitive Products
Claims Service
Responsiveness of Underwriting
Importance of Core Process Capabilities
Must-Have

8. 8© CELENT
Product Development/Management Trends
• Typical Practice
– Standard products based on ISO
– Internal data combined with industry loss costs
– IT Coding required
• Newer
– Expanded product set for rapidly changing new exposures
– Products targeted for specific industries or users
– Expanded product types
- Services embedded in the product – e.g. home monitoring
- Parametric products – payment when events occur, rather than losses
- Behavioral based rating and assessment– e.g. telematics
– Electronic ISO support
– More complex rating schemes e.g. multi-variate rating algorithms, by-peril rating
Tiered Rating
Base Rate

9. 9© CELENT
New exposures
3D PRINTING

10. 10© CELENT
Expanded product types

11. 11© CELENT
• Receive
• Log and track
• Review
• Distribute
Receive and
track circulars
• Interpret
• Size
• Scope
• Timing
• Legal Impact
• Rate impact
Analyze
changes • Make form
changes
• Make rate
changes
• Handle filings
Finalize
changes
• Business
requirements
• System specs
• Test cases
• Code
• Test
Update
System
Most Carriers Rely on ISO

12. 12© CELENT
• Tracking tsunami of circulars
• Insufficient lead time to react by filing date
• Lengthy process to interpret, decide, file, code, and implement
• Lead time needed for customers in some states
• Premium leakage if out of date on rates
• Loss leakage when behind on form changes re: emerging trends
• Many people and departments are involved in managing ISO
• Changes may need to go into multiple systems
• Changes may impact multiple LOBs
• Regulatory impact for doing this wrong
But Maintaining Rates, Rules and Forms is Complex and Labor Intensive

13. 13© CELENT
• Electronic rating content
• Provides electronic feeds for rates, rules,
forms attachment logic
Newest Option

14. 14© CELENT
Importance of ISO Enablement Today and in the Future

15. 15© CELENT
• Quickly roll out new products
• Quickly roll out product changes
• Higher productivity by automating manual processes
• Reduced time to bring up new programs
• Regulatory compliance
• Lower cost of implementation
Benefits

16. 16© CELENT
• Products will continue to change – frequently
• Speed to market is critical
• Flexibility is required for competitive differentiation
• The ability to manage ISO easily is a key capability that carriers require.
• ERC is a new option that carriers are increasingly interested in
Conclusions

17. 17© CELENT
Webinar Poll Question & Result

18. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
ISO ERC Suite
Implement ISO Circular Updates
Efficiently
November 3, 2016
Mark Sheehan
Head of ISO Rating Solutions

19. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
ISO Updates Announced via Circulars
Source: Novarica Research Partners Program Report, ISO Support: A
Comparison of Manual and Electronic Practices

20. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
ISO Updates Published via ISO CLM

21. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
A Typical Manual Process for Implementing ISO Updates

22. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
Source: Novarica Research Partners Program Report, ISO Support: A Comparison of Manual and Electronic Practices
Manual Process – Time and Staff

23. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
1 1
2
3
5
6
7
2
4
3
ISO circular info received,
tracked, and disseminated
Product area analysis of ISO
circular begins
Product area changes submitted
Systems analysis begins
Business logic built with
product area input
Company deviations built and
tested
Product area tests new logic to ensure correct
interpretation
ISO circular received;
ERC downloaded and integrated
Changes moved to
production
8 Changes moved to
production
*Sample
With ISO ERC Suite, it’s 1-2-3

24. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
By using ISO content in electronic format, insurers
have realized on average:
Source: Novarica Research Partners Program Report, ISO Support: A Comparison of Manual and Electronic Practices
ISO ERC Suite – Time and Cost Savings

25. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
Suite
ISO ERC Suite vs. Commercial Lines Manual

26. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
ISO Commercial Lines
• Businessowners
• Commercial Auto
• Commercial Inland Marine (filed/non-filed)
• General Liability
• Commercial Umbrella
• Commercial Property
• Crime and Fidelity
• Commercial Package Policy
Workers Compensation
• Bureau States
• Non-monopolistic (independent bureau) states
26
Lines of Insurance Supported

27. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
BOF Rule# Name
RUL Primary Rule Liability Coverage Commercial Auto Vehicle Liability Coverage.Premium
TAB DBTablesUsed Commercial Auto Vehicle Liability Coverage
BBB Total Premium Commercial Auto Vehicle Liability Coverage
COM Type Operator Value
PCH Premium
IFB CW1Condition IF
IFM CW1 (
IFM CW1 Vehicle Type
IFM CW1 Is Equal To "Truck"
IFE CW1 )
IFB CW1Condition IF
IFM CW1 (
IFM CW1 Trailer How Used
IFM CW1 Is Equal To "Not Applicable"
IFM CW1 Or Trailer How Used
IFM CW1 Is Equal To "Used In Dumping Operations"
IFE CW1 )
CVS Assignment Premium
CVM CW1 =
CVM CW1 ( Base Premium
CVM CW1 * Premium ILFDeductible
CVM CW1 * Liability Combined Rating Factor
CVM CW1 * Fleet Factor
CVM CW1 * Accident Prevention Discount Factor
CVM CW1 * Hired Auto Factor
Premium Calculation Example

28. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
• 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 as an analysis tool.
Rates & Valid Values Electronically…

29. © 2016 Insurance Services Office, Inc. All rights reserved. Confidential and Proprietary.
Webinar Poll Question & Result

30. 30
ValueMomentum

31. 31
Agenda
 Company Overview
 Demonstration
 Discussion

32. 32
CORPORATE FACTS
• Software & Services Firm
• Insurance & Financial Services
• Established in 2000 with HQ in NJ, USA
• 100+ dedicated R&D team
iFoundry Rating
Engine Customers
Worldwide
Customers leveraging ISO
ERC in iFoundry Rating
Engine
Insurance Carriers Served in
North America
Global employee strength
with 20% growth in 2015
Compound Annual
Growth Rate since 2000
23% 3
Industry Analysts covering
ValueMomentum software
& services
>50 1250+ 18 6
Corporate Factsheet

33. 33
iFoundry Rating - Highlights
Visual administration and monitoring Rating Engine
PAS
Agent
Portal
ISO ERC (coverages, definitions, rates and
rules)
Ongoing Tracking
Rating Plan Design Interactive Testing Book Impact Analysis (What-If)
Collaborative Design, Development &
approval
Rapid and Accurate Transaction Processing
Visual administration and monitoring of
Plans, Plan Portfolios
Rating API, web-services
Rating Services
Rate
Indications
On-premise Cloud
Available
BOP Auto Property GL Inland Marine Crime All TerritoriesWorkers Comp.

34. 3434
ISO LOB CW
ISO LOB CW
WHAT THIS MEANS FOR CARRIERS?
Familiarity
Actuaries and Underwriters know multi-state and state exceptions. Reviewing
rates and rules in our system will feel like reviewing State Insurance Manuals
Reusability
Common rate and rule definitions are created only do not need to be cloned
when creating state specific exceptions. This promotes reusability and creates
efficiencies within carrier organization
Extensibility
Advance reuse capabilities enable quick and easy implementation of ISO, niche
and company specific features all in one system without losing track of what’s
ISO and what’s specific to a company
Change Control
Each Rate Plan in iFoundry is versioned and price of a policy is determined
based on rates and rules that correspond to the effective date of the policy
Insightful Decisions
Our software can help carriers make educated decisions regarding their future
based on historical information
ISO LOB CW
ISO LOB CW
ISO LOB CWISO LOB AZ
Exceptions
BASE ISO RATE PLAN
ISO LOB CW
ISO LOB CWISO LOB CA
Exceptions
ISO LOB CW
ISO LOB CWISO LOB WY
Exceptions
…………
Typical Rate Plan Structure
CARRIER RATE PLAN
ISO LOB CW
ISO LOB CWCompany LOB
AZ Exceptions
…… ISO LOB CW
ISO LOB CWCompany LOB
CA Exceptions
ISO LOB CW
ISO LOB CWCompany LOB
WY Exceptions

35. 35
Demo
 Design Workbench – Rates, Rules, Forms
 Walkthrough on ERC Content in iFoundry
 Carrier Innovation & Extension Capabilities
 Change Management of Rates & Rules

36. THANK YOU!
Email: solutions@valuemomentum.com
ASIA PACIFIC
Plot No 36 & 37, Gachibowli,
Financial District,
Nanakramguda,
Hyderabad – 500032, India
US HEADQUARTERS
220 Old New Brunswick Rd,
Suite 100,Piscataway 08854
T: 908-755-0048
THANK YOU!
Email: solutions@valuemomentum.com
ASIA PACIFIC
Plot No 36 & 37, Gachibowli,
Financial District,
Nanakramguda,
Hyderabad – 500032, India
US HEADQUARTERS
220 Old New Brunswick Rd,
Suite 100,Piscataway 08854
T: 908-755-0048