AAIS vs ISO Insurance Forms and Rating Explained for Commercial Lines

AAIS and ISO are often discussed together in commercial insurance, yet they serve slightly different purposes and are chosen for different types of programs. Understanding the differences between AAIS and ISO is critical for MGAs, wholesalers, program administrators, and carriers designing commercial lines products.

This guide explains how AAIS and ISO compare, where each is typically used, and how insurance programs are actually operated once standards are selected.

What Are AAIS and ISO in Insurance

American Association of Insurance Services and Insurance Services Office are insurance advisory organizations that provide standardized policy language and rating guidance.

Both organizations exist to help insurers:

• Reduce inconsistency in policy forms
• Support regulatory compliance
• Standardize rating methodologies
• Improve data and reporting consistency

Neither AAIS nor ISO sells insurance or operates insurance programs directly.

What AAIS and ISO Have in Common

AAIS and ISO share several foundational similarities.

Both organizations:

• Draft commercial insurance forms and manuals
• Publish rating guidance used by carriers and MGAs
• Support regulatory filing processes
• Act as standards bodies rather than operating platforms

Choosing between AAIS and ISO is rarely about compliance alone. It is about flexibility, program design, and how a product will be operated at scale.

Key Differences Between AAIS and ISO

The practical differences between AAIS and ISO appear once programs move beyond theory and into operation.

ISO Characteristics

ISO is commonly associated with:

• Highly standardized policy forms
• Broad adoption across admitted lines
• Consistency across carriers and geographies
• Less flexibility for program specific customization

ISO is often favored when uniformity and scale across many carriers are the primary goals.

AAIS Characteristics

AAIS is commonly associated with:

• Modular and configurable policy forms
• Flexibility for specialty and delegated authority programs
• Strong adoption in Inland Marine and Builders Risk
• Support for program administrator and MGA models

AAIS allows carriers and MGAs to tailor coverage structures while still operating within a standardized framework.

AAIS vs ISO for Builders Risk Programs

Builders Risk programs frequently involve complex construction scenarios, phased projects, and multiple stakeholders.

AAIS is often chosen for Builders Risk because it supports:

• Multiple Builders Risk structures such as Civil, MU, and MU SPEC
• Custom endorsements and coverage variations
• Course of construction risk flexibility

ISO Builders Risk forms may be used in some contexts, but AAIS is widely preferred when customization and program structure flexibility are required.

Learn more about operating Builders Risk programs using AAIS

AAIS vs ISO for Inland Marine Programs

Inland Marine programs often involve diverse risk types and rating methodologies.

AAIS is commonly used for Inland Marine because it supports:

• Motor Truck Cargo rating by vehicle or gross receipts
• Flexible class and exposure handling
• Complex endorsement structures

ISO Inland Marine standards are available, but AAIS is frequently selected for delegated authority and program based Inland Marine products.

Learn more about Inland Marine program operations

Why the AAIS vs ISO Decision Is Only the First Step

Selecting AAIS or ISO defines standards, not operations.

Regardless of which organization is used, insurance programs still require systems that handle:

• Rating implementation
• Policy binding and issuance
• Endorsements and mid term changes
• Accounting visibility
• Reporting and oversight

This is why many AAIS and ISO based programs rely on commercial lines platforms to operationalize standards.

See how standards are implemented in practice:

Production Ready AAIS Commercial Lines Platform for MGAs Wholesalers and Carriers

How MGAs and Carriers Decide Between AAIS and ISO

The decision between AAIS and ISO is typically influenced by:

• Line of business
• Degree of customization required
• Delegated authority structure
• Carrier governance preferences

Many organizations use both AAIS and ISO across different products depending on program needs.

Frequently Asked Questions About AAIS vs ISO

Is AAIS better than ISO?
Neither is universally better. AAIS is often chosen for flexibility and specialty programs, while ISO is favored for standardization and admitted lines.

Can carriers use both AAIS and ISO?
Yes. Many carriers use ISO for certain products and AAIS for others.

Does AAIS replace ISO?
No. AAIS and ISO coexist as standards organizations serving different program needs.

Do AAIS or ISO run insurance programs?
No. Both organizations provide standards, while platforms and carriers operate the insurance programs.

How Selectsys Supports AAIS and ISO Programs

Selectsys provides the operational layer that turns AAIS and ISO standards into live insurance programs.

This includes:

• Rating implementation
• Policy issuance and endorsements
• Accounting visibility and reporting
• Delegated authority support

Learn how standards are operationalized: AAIS Rating Policy Issuance and Accounting

Conclusion

AAIS and ISO both play critical roles in commercial insurance. Understanding their differences helps organizations design better programs, but success ultimately depends on how those standards are implemented operationally.

As programs become more specialized and delegated authority models expand, platforms that can operationalize AAIS and ISO standards become increasingly important.