Grid-Based Insurance Rating Using Coordinate Data
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Solution Overview
Problem
Existing insurance rating systems face challenges in accurately pricing policies due to inconsistent and non-uniform geographic data associations, leading to complex search processes and inefficient data compilation, particularly in areas with changing boundaries and uneven population distribution.
Innovation Solution
A method using a programmed computer system that receives a coordinate pair of longitude and latitude to determine a target coordinate grid block, queries a database for associated data, and calculates a pure premium based on analysis of data within and surrounding grid blocks, allowing for more precise and efficient risk assessment.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional geographic boundaries (county, city, ZIP code) are used for data aggregation, then data can be organized by administrative regions, but the boundaries are arbitrary, change over time, and create inconsistent data associations
Solution Approach 1:
The patent divides the geographic space into a grid system of uniform cells based on latitude and longitude coordinates. This segmentation replaces the complex administrative boundary system with a standardized grid structure, enabling consistent data association across different regions while simplifying the search process through uniform grid-based queries.
2Reliability
If data is aggregated by administrative boundaries, then data can be easily organized, but population distribution is uneven and boundaries change over time
Solution Approach 1:
The patent changes the fundamental parameter for geographic aggregation from administrative boundaries to coordinate-based grid cells. This parameter change enables reliable data association that is not affected by political boundary changes or population distribution variations, while maintaining ease of operation through standardized grid queries that are independent of administrative changes.
3Quantity of substance
If a complex search process is used to compile relevant data, then comprehensive data can be gathered, but the process is computationally difficult and inefficient
Solution Approach 1:
The patent introduces a grid-based intermediary structure that mediates between the location data and the comprehensive data sources. This grid system serves as an index that enables efficient data retrieval by transforming complex multi-condition searches into simple grid cell queries, thereby maintaining data completeness while dramatically improving compilation speed.
Data Source
AI summary
A method for rating insurance products using a programmed computer system comprising: receiving a coordinate pair comprising a longitude and a latitude of a location; determining a target coordinate grid block bounded by latitude and longitude lines, which grid block is associated with the coordinate pair; querying a database for a first set of existing data associated with the target coordinate grid block, wherein the existing data was associated with the target coordinate grid block prior to receiving the coordinate pair; querying a database for a second set of existing data associated with a regulator, which regulates insurance policies in a geographic area comprising the location; and calculating a pure premium based on constant values and an analysis of the data in the first set and the second set.