Decentralized Damage Coverage System with Dynamic Risk Extrapolation

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Solution Overview

Problem

Current damage coverage systems in the vehicle industry face challenges in efficiently managing and optimizing risk fluctuations, as they are based on quota-sharing systems with limited ability to free tied-up capital for other purposes, and lack precise monitoring of user operations, leading to uncertainties in risk assessment and premium determination.

Innovation Solution

A single-stage or multi-stage damage coverage system that allows for the transmission of backing and compensation parameters between a central unit and decentralized risk devices, using an extrapolation module to specify future risk parameters, and a clearing module to manage crediting and decrementing of money values, enabling uncorrelated risk support and optimizing capital usage.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If a quota-sharing system is used for damage coverage, then risk distribution among multiple parties is achieved, but capital remains tied up and cannot be freed for other purposes

Engineering Contradiction:

Improverisk coverageVSAvoidcapital liquidity

Core Design Contradiction:

ReliabilityVSLoss of energy

Solution Approach 1:

The patent segments the damage coverage system into multiple independent risk devices, each with its own backing amount parameters. This segmentation allows individual devices to be monitored and rated separately, enabling more flexible capital management while maintaining overall risk coverage through the distributed architecture.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The system implements continuous monitoring and feedback mechanisms that track user operations and risk parameters in real-time. This feedback enables dynamic adjustment of backing amounts and premiums, allowing capital to be optimized based on actual risk exposure rather than being statically tied up in traditional quota-sharing arrangements.

Inventive Principle:

Principle #23Feedback

2Loss of information

If traditional monitoring methods are used, then user operations are tracked, but risk assessment remains uncertain due to lack of precise data

Engineering Contradiction:

Improverisk data completenessVSAvoidrisk assessment accuracy

Core Design Contradiction:

Loss of informationVSMeasurement precision

Solution Approach 1:

The decentralized risk devices serve multiple functions: they monitor user operations, collect risk data, perform real-time assessments, and manage backing amounts. This multi-functionality ensures comprehensive data collection while improving assessment precision through integrated processing capabilities at the device level.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The system replaces traditional mechanical monitoring methods with electronic sensors and digital communication networks. This substitution enables precise, real-time measurement of risk parameters and user operations, transforming qualitative risk assessments into quantitative, data-driven evaluations.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Adaptability or versatility

If actuarial methods with rating devices are used, then premiums can be assessed based on risk classification, but the system lacks dynamic adaptation to user-specific operations

Engineering Contradiction:

Improveuser-specific customizationVSAvoidsystem structure

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The system transitions from static actuarial tables to dynamic, real-time risk assessment. Backing amount parameters and premiums are continuously adjusted based on current user operations and risk conditions, allowing the system to adapt dynamically to changing circumstances while maintaining a relatively simple decentralized structure.

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

Each decentralized risk device autonomously performs monitoring, assessment, and parameter adjustment for its associated user. This self-service capability eliminates the need for complex centralized processing while enabling highly user-specific customization based on individual operation patterns and risk profiles.

Inventive Principle:

Principle #25Self-service

Data Source

PatentUS8290794B2Device for automatically processing and monitoring dangerous events

Publication Date: 2012.10.16 SWISS REINSURANCE CO LTD

AI summary

A single-stage or multi-stage damage coverage method and system for transport devices, including a central unit that includes a user factor and a central unit factor, the central unit storing backing amount parameters assigned to accumulable damage risks, the backing amount parameters being divisible by a split module with money amount values of a specified damage risk on the basis of the user factor and the central unit factor into backing amount parameters of the accumulable damage risks. The system includes one or more decentralized risk devices, the backing amount parameters being transmitted bidirectionally for one of the damage risks and corresponding compensation parameters between the one central unit and the one or more decentralized risk devices, and also includes an extrapolation module configured to specify one of the backing amount parameters and the compensation parameters of the specifiable damage risk for a future time interval.