The most important risk facing a property/casualty insurer or reinsurer is underwriting risk — the inherent risk of writing policies to cover unknown future events, including catastrophes.

ISOs Underwriting Risk Model (URM) is personal computer software that helps you measure and manage your underwriting risk — and set targets for profitability.

The URM comes with parameters based on ISO data, as well as data from other industry sources, so you get the most reliable estimates of claim severity and frequency on which to base your calculations.

What you can do with URM
ISOs Underwriting Risk Model can help you:

determine the capital you need to support your underwriting
allocate the cost of capital to profit centers, lines of insurance, or other categories
evaluate reinsurance and retrocession programs
optimize your mix of reinsurance and capital
set targets for combined ratio by profit center, line of insurance, or other categories
plan areas for growth and contraction
support your discussions with rating agencies about your companys financial strength
provide underwriting risk parameters for your risk and capital-management (dynamic financial analysis or enterprise risk management) model
Heres how it works
The URM quantifies your companys cost of capital, taking into account:

loss volatility, including the risk of adverse development for long-tailed lines, as well as catastrophe risk
how long you must hold capital to support the risk involved
the correlations — or common dependencies — between lines of insurance
your reinsurance program