Telematics-Based ISO Rule Gaining Regulatory Approval

The GeoMetric rule allows insurers to adjust premium based on where a vehicle is driven most often, not just where it is garaged.

ISO announced today that it has filed its first vehicle telematics-based rating rule in 33 states and received approvals in 19 states. The optional GeoMetric rating rule assesses risk of an insured vehicle based on its actual location — even if that is safer than where it is garaged.

GeoMetric was first introduced in 2010. It uses a set of predictive modeling tools called ISO Risk Analyzer to measure the risks posed at each geographic location. The GeoMetric product builds on those insights by applying the geographic risk measurements to each vehicle's driving locations. The end result is a report showing the number of miles and time traveled by the insured within each risk tier, or band. Vehicles that are garaged in higher bands but frequently travel into lower bands may be eligible for discounts of up to 25% under the program.

"The new telematics-based rating rules we filed are a significant step in the evolution of usage-based insurance," said Kevin Thompson, president of ISO Insurance Programs and Analytic Services, in a statement. "By assessing the risk of actual driving locations while protecting policyholder privacy, GeoMetric reports make it easier for insurers to use the GPS information collected via telematics to identify and award discounts to safer risks."

The GeoMetric rating rule is the first telematics-based program that ISO has filed with insurance regulators in various states. The personal and commercial auto rating rules are designed to integrate easily with insurers' own rating structures. Insurers that contribute telematics data, along with corresponding premium and loss information, to ISO's Driving Behavior Database for Modelers will receive GeoMetric reports as well as access and input to the rest of ISO's telematics suite.

[Insurity acquires AQS, citing 'unique' ISO relationship.]

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio