ISO Risk Analyzer
Homeowners
Building Characteristics Module
Determine the effect propertyspecific attributes have on your
loss exposure, peril by peril
In today’s increasingly competitive homeowners
market, following the assumption that “a house is
a house is a house” when rating and underwriting
your policies can be disastrous.
Even homes on the same street of similar age, size, and replacement cost value can vary widely from each other in their susceptibility to certain perils and the associated loss potential. Just think
of the difference in loss potential of hail hitting a tile roof compared with the composite shingle roof right next door. Do you
know how accurately the policies in your book of business are
priced based on the specific building features and characteristics
of the homes you insure?
The ISO Risk Analyzer® Homeowners Building Characteristics
Module is a powerful analytic tool that incorporates propertyspecific features, including age of roof, number of rooms, square
footage, and lot size; amenities such as pool and finished
basement; and other construction-related variables to project
highly refined loss cost relativities by peril.
By examining how specific building features and characteristics can
affect each individual peril’s contribution to the total loss cost, the
new module provides you with a more sophisticated way to analyze your loss exposure and identify the key drivers of loss costs so
you can develop a premium more appropriate for a particular home.
The building characteristics module adds a level of advanced
analytics that — for an individual risk — determines which
property characteristic variables matter, how much they matter,
and how the interaction of variables affects the overall risk of
nine major homeowners peril categories.
The latest tool in ISO’s analytic arsenal
The key to gaining a bigger share of the homeowners
market isn’t just writing more business; it’s writing
smarter, more efficiently which keeps losses and expenses
down. To do so, you must become more precise in your
risk identification and selection and more accurate in
your pricing.
The building characteristics module is the latest tool in
ISO’s analytic arsenal that an insurer of any size can use to
enhance its risk segmentation efforts and differentiate itself
from the competition. The building characteristics module
provides insight for developing marketing, underwriting,
and pricing strategies by taking homeowners risk segmentation analysis to a highly detailed level.
What you’ll get:
You’ll receive the full detail from the module, including all you
need to better determine the risk arising from a home’s particular
characteristics. The output includes:
•by-peril building characteristics relativity for nine peril
categories
•all-peril combined score (ranging from 200–800) used in our
filed rating rule
•all-peril combined relativity associated with the score
•individual relativity tables for each variable by peril
•adjustments to rating factors AOI (amount of insurance) and
AOC (age of construction)
Built by Predictive Modelers for Predictive Modelers
TM
ISO Risk Analyzer
We provide the output in a functional spreadsheet with
drop-down menus from which you can select the property
characteristics you want to enter. By being able to choose
different property characteristics, you can see the effect of
the characteristics on the resulting relativities and scores by
individual peril and by all perils combined.
Which perils pose the biggest
risk to these houses?
The answer depends on the individual structure
and the unique building characteristics of each.
Use as stand-alone analytics or enhancement
You can use the output from the ISO Risk Analyzer Homeowners
Building Characteristics Module as stand-alone analytics to
help classify, segment, and price your homeowners risks with
confidence. Or you can use the module’s output to enhance
your current analytic solution and better meet your objectives.
Data sources
ISO built the module using a large, stable data set drawn from
homeowners statistical data and loss cost information, additional
insurer policy-level data, and tax assessor data.
ISO filing
The rule filings based on this module are in progress.
Analytic suite
In addition to the building characteristics module, ISO Risk
Analyzer Homeowners features the environmental and by-peril
rating factors modules. With this powerful set of analytic tools,
you can take a more holistic approach to analyzing your
homeowners book of business, so you can make smarter, more
informed decisions for successfully writing business in even the
most challenging segments of the market. The three homeowners modules are part of the ISO Risk Analyzer suite of predictive
modeling tools, which also includes ISO Risk Analyzer Personal
Auto and ISO Risk Analyzer Commercial Auto.
RISK CHARACTERISTICS
Address
2 Winding Lane,
Sametown, ST 12345
Year Built
1985
PPC
5
Coverage A
$ 325,000
Deductible
$1000
BUILDING CHARACTERISTICS
Construction Style
Ranch
Heating System
Forced Air
Number of Bathrooms
2
Roof Type
Tile
BUILDING CHARACTERISTIC RELATIVITY
Wind
1.207
Water – Weather
0.954
Peril with Highest
Wind
Relativity
16 Winding Lane,
Sametown, ST 12345
1985
5
$ 325,000
$1000
Colonial
Baseboard
3
Composite Shingles
0.894
1.340
Water – Weather
In this simplified illustration, let’s look at two houses on the
same block. Both were built the same year and have the same
calculated replacement cost. However, each house is a
different construction type, and the unique building characteristics of each home can have markedly different effects on
individual peril losses. To help you rate each risk more
precisely, the ISO Risk Analyzer® Homeowners Building
Characteristics Module relates losses — at the peril level —
to objective and identifiable building characteristics and
provides a highly refined estimate of loss potential based on
those characteristics. You can see which perils pose the
biggest risk to a house, based on the building characteristics,
so you can price your policies appropriately.
© Insurance Services Office, Inc., 2013. ISO, the ISO logo, and ISO Risk Analyzer are registered trademarks and Verisk Insurance Solutions, the Verisk Insurance Solutions logo, and
“Built by Predictive Modelers for Predictive Modelers” are trademarks of Insurance Services Office, Inc. AIR Worldwide and the AIR Worldwide logo are registered trademarks of AIR Worldwide
Corporation. Xactware is a registered trademark of Xactware Solutions, Inc. All other product or corporate names are trademarks or registered trademarks of their respective companies.
z16191 (5/16)
For more information about ISO Risk Analyzer Homeowners,
send e-mail to [email protected]