Group Benefits Pricing Proxy Using Workers’ Compensation Data
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Solution Overview
Problem
Existing group benefits pricing systems require extensive information on variables such as age, salary, and gender, which are often unknown or difficult to obtain, necessitating additional interaction with potential insureds to provide accurate quotes.
Innovation Solution
A system and method that utilizes proxies from workers' compensation data, including WC average salary, area, industry, and median household age, to calculate and offer group benefits products like long-term disability and life insurance, with a feedback loop for self-tuning and filling in gaps using third-party data.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If traditional group benefits pricing systems require extensive information on variables such as age, salary, and gender, then pricing accuracy is improved, but the complexity of data collection and interaction with potential insureds increases
Solution Approach 1:
The patent uses workers' compensation data as an intermediary source to obtain proxy information for group benefits pricing. Instead of directly collecting sensitive personal data (age, salary, gender) from potential insureds, the system retrieves equivalent information from WC records that already exist in the system, thereby reducing data collection complexity while maintaining pricing accuracy
Solution Approach 2:
The system creates proxy copies of the required pricing variables by mapping WC data fields to GB pricing fields. For example, WC average salary becomes a proxy for individual salary, and WC industry code becomes a proxy for occupation risk classification. This copying approach eliminates the need for direct data collection from insureds
2Measurement precision
If traditional systems collect complete individual data before providing quotes, then pricing accuracy is improved, but the time required to provide quotes increases
Solution Approach 1:
The system performs preliminary data preparation by pre-mapping WC data fields to GB pricing variable requirements. The proxy relationships are established in advance through configuration files that define how WC variables map to GB variables, so when a quote is requested, the system can immediately retrieve and transform the data without delay
Solution Approach 2:
The system enables self-service quote generation by automatically retrieving WC data and transforming it into GB pricing inputs without requiring manual data collection from insureds. The automated data transformation process eliminates waiting time while maintaining pricing accuracy through the proxy relationships
Data Source
AI summary
A system and method for providing and utilizing a proxy to provide group benefits products is disclosed. The system and method include providing at least one variable for calculating applicability and cost of a group benefits product by proxy, wherein the proxy is provided by information included in at least a workers compensation (WC) system. The at least one variable may include WC average salary, area, industry, blue score and/or median household age. The group benefit product may be a long term disability insurance product and/or a life insurance product.