(Image source: IIR.)

Insurity (Hartford, Conn.) has launched Ratio Content and Rating Engine, an API-first regulatory content and externalized rating engine designed to help commercial P&C insurers translate bureau content into executable policy logic and deploy it consistently across multiple policy administration systems.

Ratio addresses work that begins after a carrier licenses machine-readable content from organizations such as ISO, NCCI or AAIS. Before that content can support quoting and policy issuance, the insurer must reconcile rates, rules, forms and statistical codes with its own deviations, convert the result into functioning policy logic and implement it in every relevant policy system.

For insurers operating several policy systems, that process may require teams to interpret and configure the same regulatory change repeatedly. Ratio provides a common content and rating layer intended to let a carrier ingest bureau content once, apply its company-specific decisions and make the resulting logic available to legacy, modern, purchased and internally developed systems through APIs.

Jatin Atre, CEO, Insurity, says the product originated in conversations with carriers that wanted Insurity’s regulatory-content capabilities without having to move all their business onto an Insurity policy administration system.

“A lot of the carriers that we work with said, ‘I understand you can make these changes in Insurity systems, but what about all the other systems?’” Atre relates. “That is the origination of it—it’s a carrier-driven need.”

A carrier might have six or seven policy administration systems, Atre notes, including homegrown and legacy applications as well as systems purchased from multiple vendors. Maintaining regulatory and product logic separately in each environment increases cost and creates the possibility that systems will fall out of alignment.

Ratio is intended to centralize that work while allowing each carrier to preserve the coverages, factors, rules and other decisions that distinguish its products. Insurers can establish effective dates for their deviations and retain historical versions showing what changed, when it changed and how the carrier’s decisions relate to the underlying bureau content.

Beyond Machine-Readable Content

Machine-readable content does not, by itself, give a policy administration system executable insurance logic, Atre cautions. Bureau information can arrive in formats ranging from tables and data files to more complicated electronic rating content. The receiving system still needs a way to interpret that information, reconcile it with carrier-specific requirements and perform the rating calculation.

“If you get a bunch of machine-readable content in any format—from CSV files to other kinds of complex tables—your policy system has no way to ingest it,” Atre says.

Insurity designed Ratio to manage five related functions: ingesting regulatory content; applying carrier-specific deviations; rapidly rating high-volume, comparatively straightforward policies; processing large and complex commercial risks; and distributing the resulting logic across multiple policy systems.

The combination of content management and rating is central to the product’s purpose, according to Atre. “We have been able to tackle not just the ingestion problem, but the ingestion-plus-rating problem,” he says.

Atre characterizes the interpretation and implementation of commercial insurance content—accumulated across decades of rates, rules, forms and algorithms—as one of Insurity’s core areas of expertise. Bureau updates arrive continuously and can vary by state, line of business and circular, creating a volume and complexity that carriers must manage across successive regulatory cycles.

Insurity describes Ratio as source-agnostic and can support bureau and carrier-specific content, subject to the appropriate licenses. For carriers licensing ISO content from Verisk, Ratio supports the ingestion and normalization of ISO Electronic Rating Content for use and customization within their regulatory environments.

Supporting Small and Complex Accounts

The rating engine is designed to handle the wide range of risks encompassed by commercial insurance. Insurity says Ratio can return results for commercial auto, small commercial general liability and businessowners policies in as little as 30 milliseconds. It can also process accounts containing thousands of scheduled items, including large fleets and multiline package policies.

In benchmark testing, according to Insurity, Ratio rated a commercial auto policy containing more than 30,000 vehicles 100 times faster than traditional core systems. Atre says the engine has produced small-commercial rating results in approximately 17 milliseconds and can rate some highly complex policies in about three seconds.

The performance figures come from Insurity’s load and benchmark testing rather than disclosed customer production results. Ratio is newly launched, and Atre says Insurity is in initial discussions with carriers about its adoption.

Atre argues that Insurity’s experience supporting complex commercial insurance provides a foundation for those results. The company reports 365 carrier customers, including 22 of the largest commercial-lines carriers. Its technology has historically been designed not merely to issue large volumes of relatively uniform policies, he says, but also to process accounts containing very large schedules and substantial premium.

Insurity also reports that Ratio can help carriers implement regulatory and product changes up to four times faster. For an insurer writing as few as five admitted commercial lines, the company estimates that centralized regulatory-content management could generate annual savings of $3 million or more.

Atre says he has discussed Ratio with four large carriers in recent weeks and that each wanted to assemble a team to evaluate it. He presents that response as evidence of the seriousness of the underlying problem, while stopping short of describing the discussions as production implementations.

“This didn’t come from saying, ‘Where can we use AI?’” he says. “This came from carriers saying, ‘I have your system, but I have all this other technology that doesn’t work like your system. What can you do there?’”

Atre describes Ratio’s rating technology as built natively around AI, which he says contributes to its speed and ability to manage complex rating scenarios. More broadly, he sees the product as an example of how AI-era technology could encourage insurers to separate specialized capabilities from monolithic core systems.

A Common Layer Across Core Systems

Ratio could allow an insurer to establish a common rating and regulatory-content layer without first replacing its existing policy systems, Atre confirms. That proposition potentially changes the sequence of core modernization: A carrier could centralize one important capability across its technology estate while continuing to operate a combination of legacy and modern policy platforms.

“Over time, carriers should seriously consider why monolithic systems will make sense,” Atre says. “Clients will have to decompose parts of these systems to understand whether certain microservices are going to be better for certain things.”

Rating is one such candidate, he suggests. The carrier still must manage the complexity of connecting systems and governing product logic, but the capability does not necessarily have to remain embedded separately in every policy administration platform.

That architecture also presents an unusual strategic choice for Insurity. Ratio can improve the operation of policy systems supplied by other vendors, potentially enabling carriers to retain those systems longer. Atre acknowledges the tension but says Insurity concluded that addressing the industry problem should take precedence.

“You can imagine that’s not a very easy thing for me to say, because I make most of my money in policy systems,” he says. “But it’s true.”

The approach reflects an emphasis Atre is bringing to Insurity following his appointment as CEO. The company has revised its mission, vision and values, he reports, and has added “service” as a core value.

For Atre, service does not mean accepting requests for carrier-specific custom development. It means recognizing when several insurers identify the same consequential problem and determining whether Insurity can address it with a repeatable product.

“If clients say, ‘This is my big problem,’ our job has to be, ‘How can we solve it?’” Atre says. “Then we can figure out how to monetize it. But you can’t disregard six major carriers all telling you the same problem.”

Atre says Insurity’s mission now includes helping carriers grow profitably, reduce their technology costs and improve their combined ratios—objectives reflected in the Ratio name.

“The only way to succeed long-term in vertical software is if you’re on the side of those you serve,” he says. “There’s no other way to win.”

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