In the insurance world, Insurance Services Office, Inc. (ISO) is the leading global provider of insurance tools and analytics. It helps insurers determine risk so that they can accurately price policies. The ISO also provides its services to reinsurers, third-party insurance administrators, agents, brokers, regulators and risk managers.
A brief history of ISO
Insurance Services Office, Inc. was founded in 1971 as a property and casualty insurance marketplace. It formed as a result of a merger of the databases of several companies. With this combined data, ISO began to offer analytics services, including underwriting analytics, actuarial information, and policy language.
Over the years, ISO has expanded its services far beyond its initial marketplace. It now offers risk analytics and mitigation in diverse markets far beyond the ones it started with. In 2009, ISO became a wholly-owned subsidiary of Verisk Analytics and became the database insurance carriers use today.
How ISO works
ISO analysts extract information from a database to develop language and evaluations that help insurers and other insurance businesses write policies. As a result, you might see their copyright on your Certificate of Insurance (COI). But ISO is not an insurance company; it is simply a service that many insurance companies use.
Using the data it has access to, ISO provides services for a wide variety of personal and commercial insurance companies. Here are some of the services ISO offers:
- Statistical information – With a massive database at its fingertips, ISO is able to offer wide-ranging statistics on risk and insurance.
- Actuarial information – “Actuarial information” simply means data that can be used to mathematically determine, prepare for, and react to financial risk.
- Underwriting information – Underwriting information is the information used to evaluate and undertake the risk of lending to or investing in a given entity.
- Claims information – Most insurers will consider claims information — whether it’s specifically your claims history or an industry-wide claims history — when they underwrite your policy.
- Insurance policy language – Many insurance policies are worded based on language produced by ISO. That’s why many policies will carry an ISO copyright on them, despite the fact that the policy is provided through a completely separate insurer.
- Information about specific locations – If you want to insure real estate, most insurers will research the location of the property. Say you want insurance for a storefront. An insurer will get information from ISO to determine the nature of the property and use that information to determine your policy.
- Fraud identification tools – Finally, ISO also offers fraud identification tools for financial and insurance entities hoping to mitigate the risk of fraud for their businesses.
What is an ISO report?
An ISO report is a report that incorporates data from the ISO database. This can include information about property and casualty claims associated with your identity. Insurance companies use reports from ISO as a tool to learn more about your history when evaluating claims and other issues.
What is a standard ISO policy?
A standard ISO policy is a type of policy that is drafted by ISO and used by a particular insurer. Since drafting policy forms can be time-consuming, many insurers work with the ISO to use standard policy forms rather than drafting their own. In some fields, these policies are accepted as the industry standard.
The commercial general liability insurance policy that Thimble offers is based on the ISO CG 00 01 04 13 coverage form. This means that the policy language was developed by ISO for general liability insurance.
ISO in insurance: The takeaway
Essentially, ISO is an extensive database that utilizes data in order to provide insight on best practices for businesses that handle risk.
Keep an eye out for this acronym on insurance policies. If you don’t spot the ISO trademark on a policy, then you should ask your potential insurer the source of the policy underwriting information before you buy. The ISO trademark on a policy means the language has been carefully reviewed and assessed, so any other version of a given insurance policy could be less thorough and less regulated.
You’re in good hands with Thimble — because you’re in total control of your policy. No matter the size of your business, get a policy by the job, month, or year in minutes and modify, pause, or cancel anytime. Click “get a quote” and get going today.
