ISO announces that filings have begun for an optional ratingrule that uses the output of the by-peril predictive modeldeveloped by ISO. The predictive model is known as ISO RiskAnalyzer Homeowners. ISO recently began the regulatory filingprocess and expects to complete the process for several states at atime over the coming months.

ISO Risk Analyzer Homeowners is a set of predictive models thathelp insurers to classify and segment risks. The environmentalmodule predicts expected losses at a much more refined geographiclevel than traditional territories. The module also determinesexpected losses separately by major peril, including wind, fire,lightning, liability, theft and vandalism, hail, water related toweather, water not related to weather, and all other perils for abase risk. In addition, the model can aggregate the by-perilexpected losses to an all perils combined basis.

"By predicting expected losses at the policy level by peril, theenvironmental module of ISO Risk Analyzer Homeowners helps insurersevaluate homeowners' risks with greater precision and thus enhanceaccuracy," says Kevin Thompson, senior vice president of InsuranceServices at ISO. Developed with advanced modeling techniques, theenvironmental module analyzes the interactive effects of hundredsof variables derived from data from ISO and external sources andprovides insurers the flexibility to assess and refine homeownersrating with one set of analytic tools.

"This will enable insurers to better classify, segment, andunderwrite homeowners risks," says Thompson.

The environmental module is one of several ISO Risk AnalyzerHomeowners modules that insurers will be able to use individuallyor together depending on their analytic objectives. At this time,more than a dozen insurers are participating in pilot tests toevaluate the environmental module. The other models underdevelopment include the rating factors and building characteristicsmodels.

Insurers can integrate the environmental module and futuremodels into their own predictive models or use ISO Risk AnalyzerHomeowners as a stand-alone model. To send and receive reports,insurers can choose secure FTP, interactive mainframe delivery, orbatch order processing.