Insurance Services Office announced that it has developed a loss-reserving tool that draws on large, detailed ISO databases to enable insurers to set loss reserves more accurately.

According to Jersey City, N.J.-based ISO, insurers can use the results of the new tool to benchmark reserves against ISO direct (before reinsurance) data and provide ranges around their own reserves.

ISO said the tool may also help insurers that have begun writing or are considering entering new business segments.

The new loss-reserving tool mirrors an insurer's book of business for each line of insurance to produce two customized aggregate loss development data reports--the Mix of Business Report and the Segment Report, said ISO.

The Mix of Business Report uses ISO aggregate data that is customized for the insurer's unique mix of business to generate multiple estimates of the carrier's loss reserves, ISO explained. After the insurer selects its best estimate of reserves, the tool provides several ranges of results around the best estimate.

The Segment Report provides an analysis of ISO aggregate data for the segments--by state, coverage or class groupings--that the insurer has selected, said ISO.

Pricing for the tool begins at a minimum of $5,000 for three segment reports, a company spokesperson said. Additional costs depend on segments selected and level of customization.

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