ISO Claims Severity Index

The ISO Claims Severity Index measures the average expense of insurance claims filed by policyholders. It helps insurers understand how costly claims are on average, providing insight into potential risks and the financial impact of claims over time. A higher index indicates that claims tend to be more expensive, which can signal increased risk or changing claim patterns. Insurers use this index to assess pricing, reserve setting, and risk management strategies, ensuring they are financially prepared for expected claim costs and maintaining stability in their insurance offerings.