ISO Launches New Program for Underwriting and Pricing Wind Exposure

ISO launch its Enhanced Wind Rating Program, a commercial property rating program designed specifically to address the wind peril.

The program provides a detailed review of building characteristics and geographic and environmental factors that may improve – or worsen – a building’s wind resistance or damageability.

“The engineering-based, actuarially sound program fills a void in the insurance industry by quantifying a building’s resistance and exposure to wind damage,” said Beth Fitzgerald, senior vice president of ISO’s Insurance Programs and Analytic Services division. “Using wind-related building and exposure characteristics, insurers can more precisely identify, measure and price exposures specific to the wind peril,” added Fitzgerald.

ISO filed the program with state regulatory authorities earlier this year. The program becomes effective in 26 states during the first quarter of 2013.

A total of 36 states are eligible for the program.

“Eligibility for this program is based on the geographic risk from wind. The initial program targets buildings in high wind-risk areas and will reflect the specific wind exposure of eligible commercial buildings in those areas. The key exposed areas are along the coast, where the hurricane exposure is significant, and the central part of the country, where tornadoes are the key threat,” according to Fitzgerald.

“Insurers have indicated a need for a program that will allow them to match the premium they charge more directly to wind loss exposures, assist in comparing disparate risks, and provide them with building data to feed into underwriting systems and catastrophe models,” said Kevin Kuntz, assistant vice president of Verisk’s Commercial Property division. “More detailed wind rating can improve the process of identifying and pricing building-specific wind exposure.”

ISO field representatives began collecting enhanced wind rating data in April 2011. The data collected provides information on approximately 40 characteristics related to the wind exposure for each eligible building – encompassing such areas as location and surrounding environment, roof and wall envelope integrity, framework, and building codes.

Source: ISO is a member of the Verisk Insurance Solutions group at Verisk Analytics.