Finite State Machine Policy Administration Systems
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Solution Overview
Problem
Existing policy administration systems in the insurance industry are inefficient due to their monolithic structure, which isolates systems for different products or lines of business, making data sharing difficult and leading to slow and inefficient transaction processing.
Innovation Solution
Developing policy administration systems based on finite state machine models, where each insured household is modeled as a self-contained system with defined states, events, and transition functions, enabling concurrent processing of transactions and efficient data management.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If separate monolithic systems are used for different products or lines of business, then system isolation and data security are improved, but system performance and transaction processing speed deteriorate
Solution Approach 1:
The patent segments the policy administration system into multiple independent finite state machine-based processing units, each handling specific households or policy groups. This segmentation enables parallel processing of transactions across different segments while maintaining data isolation through the finite state machine boundaries, thus improving both system isolation and transaction processing speed simultaneously
Solution Approach 2:
The patent merges multiple monolithic systems into a unified finite state machine-based architecture where all systems share a common processing framework and data model. This merging allows transactions to be processed concurrently across what were previously separate systems, improving overall productivity while the finite state machine structure maintains logical isolation equivalent to the original separate systems
2Ease of manufacture
If separate monolithic systems are used for different products or lines of business, then system simplicity and implementation ease are improved, but data sharing capability and system efficiency deteriorate
Solution Approach 1:
The patent implements a universal finite state machine data model that can represent any insurance product or line of business through standardized states, events, and transitions. This universal model enables different products to share the same system infrastructure while maintaining product-specific behavior through configuration, thus improving data sharing capability without sacrificing implementation ease
Solution Approach 2:
The patent introduces dynamic configuration capabilities to the finite state machine model, allowing the system to adapt to different products and lines of business through configurable states, events, and transitions. This dynamic approach enables the system to be easily implemented for new products while maintaining robust data sharing capabilities through the common finite state machine framework
Data Source
AI summary
A new design strategy based upon finite state machine models is used to develop a policy administration system. The policy administration system comprises a plurality of finite state machined-based households, each of which is defined by a set of states represented by data that describe or relate to various policies associated with each household, a set of events represented by transactions that operate on the data, and/or a set of transition functions represented by transaction logics and/or product rules that govern how the transactions are processed. In this manner, each finite state machine-based household becomes a type of self-contained policy administration system that may be executed and managed concurrently. Each policy may be an insurance policy, such as an auto, home, life, renters, personal articles, or health insurance policy. Each finite state machine-based or virtual household may facilitate managing, updating, or generating insurance policies for the household and/or household members.