API vs ISO vs Proprietary Insurance Rating for MGAs and Wholesalers
MGAs and wholesalers are often forced to choose between different rating approaches. Some vendors push API only models. Others rely entirely on ISO based rating. Program business introduces proprietary rating logic that does not fit either model cleanly.
The reality is simple. Choosing one rating method is a mistake. Real platforms support all three.
This is why the Selectsys Commercial & Specialty Rating Platform was designed to support API based carrier rating, ISO based rating, and proprietary rating programs within a single unified system.
Why This Debate Exists At All
The debate between API, ISO, and proprietary rating exists because many platforms were built for only one use case.
- API first platforms were designed for speed but limited carrier coverage
- ISO based platforms were designed for standardization but lack flexibility
- Proprietary program tools were built for one off programs and do not scale
As MGAs and wholesalers grow, they inevitably encounter all three models. Platforms that only support one create friction instead of leverage.
API Based Rating
What it is
API based rating connects directly to carrier systems to generate real time quotes. This model is fast, scalable, and ideal for high volume quoting where carriers support modern APIs.
Where it works best
- General Liability
- Workers Comp
- Cyber
- High volume standard commercial submissions
Where it breaks down
- Carriers without mature APIs
- Specialty programs with custom underwriting
- Program business where rates are owned by the MGA
API rating is powerful, but it is not sufficient on its own.
ISO Based Rating
What it is
ISO based rating provides standardized rules and rates that many carriers and programs rely on, especially in commercial lines. ISO based workflows remain critical for large segments of the market and are deeply embedded in underwriting operations.
This includes platforms built on ISO standards such as those supported by American Association of Insurance Services.
Where it works best
- Commercial Property
- Inland Marine
- Builders Risk
- Standardized commercial programs
Where it breaks down
- Rapid program launches
- Custom rating logic
- Modern API driven workflows
ISO based rating is foundational, but it must coexist with other models.
Proprietary Rating Programs
What it is
Proprietary rating is used when the MGA or carrier owns the rates, rules, and underwriting logic. This is common in program business and specialty lines.
Where it works best
- Delegated authority programs
- Specialty lines
- Emerging risks
- Custom underwriting structures
Where it breaks down
- Without a platform that can scale
- When built as one off spreadsheets or tools
- When disconnected from issuance and accounting
Proprietary rating without platform support quickly becomes technical debt.
Why Real Platforms Support All Three
MGAs and wholesalers do not operate in a single rating world.
A single organization may need to:
- Use API rating for some carriers
- Use ISO based rating for others
- Operate proprietary programs at the same time
Forcing teams to move between systems creates errors, slows turnaround, and limits growth. This is why real platforms unify all three rating models into a single workflow.
Where This Shows Up By Line Of Business
The need for multiple rating models is most visible in major commercial and specialty lines:
No single rating model covers all of these lines effectively.
Rating Must Extend Beyond Quoting
Another mistake platforms make is stopping at quoting.
Once a quote is generated, teams still need to:
- Bind coverage
- Issue policies
- Manage endorsements
- Collect premiums
- Reconcile carrier payables
When rating is disconnected from issuance and accounting, operational risk increases. This is why Selectsys built rating as part of a broader platform that includes policy issuance and premium accounting workflows.
The Role Of AAIS In A Modern Rating Stack
AAIS based platforms play an important role in commercial rating, especially for standardized lines and delegated authority programs. When integrated properly, AAIS rating can coexist with API driven and proprietary rating models inside a unified platform. This approach preserves standardization where needed while enabling flexibility and speed where programs demand it.
Conclusion
The question is not whether API, ISO, or proprietary rating is better. The real question is whether your platform can support all three without forcing teams into separate systems. MGAs and wholesalers that scale successfully do not choose a rating method. They choose a platform that supports them all.
Next Steps
Learn how a production ready platform supports API, ISO based, and proprietary rating while extending through policy issuance and accounting:
Explore how this applies to high impact lines:
