Clash Loss Event Triggering Insurance System
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Solution Overview
Problem
Existing automated insurance systems face operational instability and inefficiency in handling catastrophic events that trigger multiple claims from multiple risk-exposed components, as they often reach their aggregate caps, leaving some claims uncovered and requiring additional risk transfer structures to manage clash loss events effectively.
Innovation Solution
A system with an event-triggered switching device that automatically links and aggregates risk-related component data to identify clash loss events, using a unique identifier to synchronize claims across coupled insurance systems, allowing for optimized risk transfer and coverage without manual adjustments, thereby stabilizing operations and reducing potential losses.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Quantity of substance
If automated insurance systems handle multiple claims from catastrophic events, then coverage capacity is improved, but operational stability deteriorates when aggregate caps are reached
Solution Approach 1:
The patent segments the insurance system into multiple autonomous resource-pooling systems, each with its own aggregate cap and risk pool. When one system reaches its cap, the switching device automatically redirects claims to other systems that have available capacity, thereby maintaining operational stability while preserving overall coverage capacity across the segmented system architecture.
Solution Approach 2:
The event-triggered switching device acts as an intermediary between multiple resource-pooling systems and the claims processing function. It monitors aggregate cap status across systems and dynamically routes claims to appropriate systems, preventing operational instability when individual systems reach their limits while maintaining comprehensive coverage through the intermediary's coordination.
2Ease of operation
If manual adjustments are made to manage clash loss events, then operational control is improved, but efficiency and speed of response deteriorate
Solution Approach 1:
The system implements self-service through automated monitoring and decision-making. The switching device continuously monitors claims data, automatically detects when aggregate caps are approaching, and autonomously redirects claims to appropriate resource-pooling systems without human intervention, thereby maintaining full operational control while maximizing efficiency and response speed.
Solution Approach 2:
The system employs feedback mechanisms where the switching device continuously receives information about claims status, aggregate cap utilization, and system availability. This real-time feedback enables automated adjustments to claim routing, providing operational control through closed-loop control while maintaining high efficiency through elimination of manual review processes.
3Reliability
If resource pooling is dynamically adjusted to cover multiple claims, then financial stability is improved, but system complexity increases
Solution Approach 1:
The patent implements dynamic resource pooling where the switching device continuously adjusts claim allocation across resource-pooling systems based on real-time aggregate cap status and available capacity. This dynamic adjustment optimizes financial stability by ensuring claims are always routed to systems with available resources, while the automated nature of the switching logic keeps operational complexity manageable despite the dynamic behavior.
Solution Approach 2:
The switching device serves multiple functions: monitoring aggregate caps, routing claims, detecting clash loss events, and coordinating between systems. This multi-functionality consolidates what could be multiple separate complex systems into a single universal control mechanism, improving financial stability through comprehensive resource management while containing overall system complexity through functional integration.
Data Source
AI summary
Proposed is an operationally independent clash loss event triggering risk transfer system and a method for risk sharing for a variable number of risk exposure components through the provision of independent risk protection for the risk exposure components by means of a risk transfer structure implemented by circuitry, which captures risk transfers of the exposure to multiple retentions of the components that may occur when two or more of the associated risk exposure components suffer a loss from the occurrence of the same risk event. The system triggers clash loss events simultaneously impacting various layers an/or segments of the risk transfer structure. Furthermore, an event-driven switching device may be deployed for the complementary switching of two coupled, autonomously operated resource-pooling systems, where the operation of the systems remains stable under particularly large losses triggered by the same measurement of a risk event.