Component-Based Insurance Product Assembly System
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Solution Overview
Problem
Insurance companies face challenges in managing insurance product development due to the need for flexibility, speed to market, and cost, as current systems rely heavily on human intervention and static forms, making it difficult to customize products quickly and efficiently for varying customer needs and new risk exposures.
Innovation Solution
A component-based system that allows for the creation of insurance products using pre-filed and pre-approved coverage components with associated rating algorithms, enabling dynamic assembly and pricing, along with a selection mechanism to combine components based on customer characteristics, reducing the need for frequent filings and human intervention.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If static forms are used for insurance products, then regulatory compliance is maintained, but flexibility and speed to market deteriorate
Solution Approach 1:
The patent segments insurance products into discrete, reusable components that can be independently selected and combined. Each component represents a modular unit of coverage that can be assembled into customized policies, enabling flexibility while maintaining regulatory compliance through pre-approved component structures.
Solution Approach 2:
The patent implements a dynamic product assembly system where insurance coverage is constructed by selecting and combining predefined components based on customer needs. This dynamic assembly process allows rapid customization and market response without requiring static, pre-defined policy forms for every scenario.
2Adaptability or versatility
If customization is increased for individual insured, then customer needs are met better, but expense and complexity increase
Solution Approach 1:
By dividing insurance products into standardized components, the system enables customization through selection and combination rather than creation from scratch. This segmentation reduces complexity by reusing approved components across multiple policies while still allowing tailored configurations for individual customer needs.
Solution Approach 2:
The patent creates universal, reusable insurance components that can serve multiple functions and be combined in various ways. These multi-functional components reduce overall system complexity by eliminating the need for unique policy structures for each customization scenario.
3Adaptability or versatility
If new coverage is created and filed, then response to new risk exposures is improved, but time and expense increase
Solution Approach 1:
The patent performs preliminary action by pre-approving and storing insurance components before they are needed for specific policies. These pre-filed components are ready for immediate selection and combination, eliminating the time-consuming process of creating and filing new coverage for each new risk exposure or customer need.
Solution Approach 2:
The system enables dynamic assembly of insurance coverage from pre-approved components, allowing rapid response to new risk exposures by combining existing validated components in new configurations without requiring new regulatory filings for each scenario.
4Productivity
If human intervention is reduced in product creation, then efficiency and speed improve, but automation complexity increases
Solution Approach 1:
Segmenting insurance products into discrete, well-defined components with standardized interfaces enables automated selection and assembly processes. This segmentation provides the structured foundation needed for automation while reducing the complexity of managing entirely custom policy creations.
Solution Approach 2:
The patent implements self-service capabilities where the system automatically assembles insurance policies by selecting appropriate pre-approved components based on customer characteristics and needs. This automation reduces human intervention while the standardized component structure manages the complexity of the assembly process.
Data Source
AI summary
A system includes an insurance component selection platform that transmits data to and receives data from an insurance product component storage unit storing one or more self-descriptive components of an insurance coverage. Each of the stored components may have associated properties defining attributes of the component and one or more values associated with the properties. The components may be selected via a graphical interface generated by the component selection platform to be included in an insurance coverage product. The components may then be combined within constraints of the properties and values of the individual components. An insurance coverage policy may then be presented based on the combination of components.