Geocoded Territory Rating System for Dynamic Insurance Sub-Regions
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Solution Overview
Problem
Existing geographical rating systems based on fixed postal ZIP codes or rectangular grids are inadequate for determining insurance-related rating factors, as they fail to account for changing local conditions and varied property profiles within these regions.
Innovation Solution
A geocoded territory rating system that uses geolocation data to dynamically determine sub-regions with shared profiles, associating each sub-region with geometric shapes and rating factors, and updates these based on changes in the region, such as development or natural disasters, to provide personalized insurance ratings.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of manufacture
If fixed postal ZIP codes or rectangular grids are used for geographical rating systems, then the system structure is simple and easy to implement, but the rating accuracy and ability to reflect local conditions deteriorates
Solution Approach 1:
The patent divides large geographic regions into smaller sub-regions based on shared property profiles and rating factors. This segmentation allows the system to maintain simplicity at the macro level while achieving precision at the micro level by grouping properties with similar characteristics together.
Solution Approach 2:
The patent applies different rating factors and geographic groupings to different local areas based on their specific characteristics. Each sub-region is tailored to reflect local conditions such as property types, disaster risks, and demographic factors, enabling accurate localised rating while maintaining an overall systematic structure.
2Stability of the object's composition
If fixed geographical regions are used for rating systems, then the system structure is stable, but the adaptability to changing local conditions deteriorates
Solution Approach 1:
The patent implements dynamic geographic groupings that can be updated as properties are added, removed, or modified. The system automatically re-evaluates and reassigns properties to appropriate sub-regions based on current characteristics, maintaining system stability through structured processes while adapting to changing local conditions through automated updates.
Solution Approach 2:
The system continuously monitors changes in property characteristics and geographic conditions, using this feedback to automatically update rating factors and reassign properties to appropriate sub-regions. This feedback mechanism ensures the system remains stable in its overall structure while adapting to local changes through systematic re-evaluation.
3Ease of operation
If postal ZIP codes are used as geographical boundaries, then the system is easy to implement, but the ability to capture varied property profiles within regions deteriorates
Solution Approach 1:
The patent segments ZIP code regions into multiple sub-regions based on shared property profiles. This segmentation preserves the ease of using existing ZIP code boundaries while recovering lost information by further dividing regions into homogeneous groups that capture varied property characteristics such as construction type, age, and disaster risk.
Solution Approach 2:
The patent applies local quality by creating sub-regions with specific property profile characteristics within broader ZIP code areas. Each sub-region is defined by shared attributes such as property type, construction materials, and exposure to natural disasters, enabling the system to capture local variations while maintaining the operational simplicity of using established geographic boundaries.
Data Source
AI summary
Methods, computer-readable media, software, and apparatuses may determine, for a geographic region and based on geolocation data, a plurality of sub-regions, where each sub-region of the plurality of sub-regions may include real properties with a shared profile. The system may associate, with each sub-region, a collection of coordinate pairs, where each coordinate pair comprises a latitude and a longitude, and the collection describes a boundary of a geometric shape corresponding to the sub-region. The system may associate, with the geographic region, geometric shapes corresponding to the plurality of sub-regions. The system may associate, with each geometric shape, a rating factor for the real properties located within the sub-region corresponding to the geometric shape. The system may store the geometric shapes and rating factors, and may generate, based on the rating factor and for the real properties located within the sub-region, an output, and provide the generated output.