PA Who is ISO?
Whether you’re an agent, a broker or a company, you are affected every day of your business life by an organization known as the Insurance Services Office. We call them ISO for short. The majority of the insurance contracts you write have the following printed at the bottom of each page: “Copyright, ISO Properties Inc.” or “Copyright, ISO Risk Services, Inc.”
Well, who is ISO? Most of us don’t really know. Notice I said “us.” That includes me.
ISO was founded in 1971 as an unincorporated association of insurance companies. The association was developed by merging several smaller underwriting service organizations. At that time these smaller organizations were, for the most part, state rating bureaus.
I was an agent in 1971, and prior to that time we agents in Alabama depended on the Alabama Rating Bureau for our rules and rates. I don’t know what you had in Pennsylvania, Maryland and Delaware at that time. Maybe some of you who were around at that time can share that information with me the next time we see each other.
ISO became a not-for-profit organization in 1982, and then a private for-profit company in 1997, owned by its member insurers and employees.
Verisk Analytics, Inc. was incorporated in Delaware in 2008 as a subsidiary of ISO. Verisk made its first public offering of stock in 2009, and at that time ISO became a subsidiary of Verisk. Verisk Analytics, Inc. is a publicly-held company, and its stock is traded on the NASDAQ Exchange. ISO is considered its major subsidiary.
ISO is headquartered in Jersey City, N.J. and has offices throughout the United States, along with international operations offices in the United Kingdom, Israel, Germany, India and China. It employs approximately 3,500 people worldwide. The current chairman, president and CEO is Frank J. Coyne.
How does ISO produce income? The company provides risk-related services to its clients. These clients include insurers, reinsurers, agents, brokers, self-insured entities, risk managers and insurance regulators. Obviously the services are not free. In the fiscal year ended December 2008, ISO’s revenues were reportedly over $893.6 million.
ISO’s databases contain more than 11 billion (yes, that’s a “b”) detailed records relating to insurance and risk management. The services the company provides to its clients include:
- statistical, actuarial and claims data for underwriting;
- development of standardized insurance policy language;
- information about specific properties and communities;
- fraud identification;
- information for marketing, loss control and premium audit;
- catastrophe modeling systems;
- rating and underwriting rules;
- motor vehicle records;
- litigation and regulatory support;
- mortgage fraud analytics;
- real estate;
- restoration and remodeling estimation services and software; and
- rates, underwriting and policy-management systems for all commercial and personal lines insurance.
ISO is constantly changing the wording of its insurance forms. You know that. When the company makes these changes, it relies on the advice of insurer and reinsurer clients and others, such as the members of the Casualty Actuarial Society. Certainly no one consults with you or me.
Maybe we should buy a few shares of Verisk Analytics, Inc. Then we can write ISO as a stockholder, rather than as a disgruntled agent, to complain about some of its changes.
Jerry Milton, CIC, contributed this resource. The legal profession recognizes him as an expert on insurance coverages. He is also an education consultant for IA&B, working with CISR, CIC and continuing education programs.