Annuity State Detection for Renewal and Surrender Value Matching
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Solution Overview
Problem
Existing systems fail to provide timely and comprehensive information on the termination and renewal dates of multi-year guaranteed annuities (MYGAs), leading to uncertainty and potential loss of value due to surrender charges and changes in growth rates, which is crucial for annuity owners and investment providers.
Innovation Solution
A system and method that utilizes a processor and memory to obtain raw data, build a vector of annuity products, calculate cash and surrender values, and match annuity products to requests, providing accurate duration, cash value, and surrender value information through a rules table and data communications network.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of energy
If carriers retain information about termination and renewal dates, then they can retain amounts paid for products, but information availability for annuity owners deteriorates
Solution Approach 1:
The patent introduces an intermediary system that acts as a mediator between carriers and annuity owners. This system collects termination and renewal date information from carriers through automated processes and makes it available to annuity owners, thereby resolving the information asymmetry without requiring carriers to directly disclose sensitive data or lose retained amounts.
Solution Approach 2:
The system implements feedback mechanisms where termination and renewal date information flows from carriers through the intermediary system back to annuity owners. This feedback loop enables owners to make informed decisions about their annuity products while carriers maintain their financial positions.
2Loss of information
If automated systems are implemented to detect annuity states, then information availability improves, but system complexity increases
Solution Approach 1:
The patent segments the complex information detection task into distinct functional modules: data collection from carriers, information processing and validation, storage in databases, and delivery to annuity owners. This segmentation reduces overall system complexity by making each component manageable and independently developable.
Solution Approach 2:
The system is designed to automatically collect, process, and distribute annuity information without requiring manual intervention. The automated processes query carriers for termination and renewal dates, process the received data, and deliver it to owners, thereby reducing operational complexity through self-service automation.
3Ease of operation
If detailed annuity information is made available, then owner decision-making improves, but data processing requirements increase
Solution Approach 1:
The system performs preliminary actions by pre-collecting and storing termination and renewal date information in databases before annuity owners need it. This advance preparation reduces the data processing burden at the time of owner inquiry, as information is already organized and readily available for delivery.
Solution Approach 2:
The system creates copies of annuity information (termination dates, renewal dates, product details) and stores them in databases. These copies enable rapid delivery to multiple annuity owners without requiring repeated queries to carriers, thereby maintaining high information availability while improving data processing efficiency.
Data Source
AI summary
A state detection system includes a processor and memory communicatively connected to the processor. The memory includes instructions for controlling the processor to obtain raw data of annuity products, write the raw data to a rules table of respective files communicatively connected to the processor, select one or more of the respective files corresponding to a request, build a vector comprised of the one or more respective files, each annuity product exhibited by the one or more respective files is a respective policy instance, calculate a respective cash value and a respective surrender value of each respective policy instance of the vector based on the raw data, calculate a projected cash value and a projected surrender value for each respective policy instance of the vector, and match the respective policy instance to the request based on the respective cash value, the respective surrender value, the projected respective cash value, and the projected respective surrender value, and calculate a duration for the respective policy instance so matched.