Insurance Payment Date Scheduling System

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Solution Overview

Problem

Insurance companies face challenges in providing customers with flexible automatic payment dates for insurance premiums while staying ahead of the earned premium curve and adhering to regulatory requirements, which can lead to customer misunderstandings and increased service costs.

Innovation Solution

A system and method that allow customers to specify their preferred pay dates for insurance policy premiums, with a server analyzing these dates against insurance policy data to determine if they are allowed or disallowed, and suggesting alternate dates if necessary, to ensure compliance with earned premium curves, notice periods, and withdrawal regulations.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If customers are given flexible automatic payment dates, then customer service quality and customer satisfaction are improved, but the complexity of managing payment schedules and compliance with earned premium curves increases

Engineering Contradiction:

Improvecustomer service qualityVSAvoidpayment schedule management complexity

Core Design Contradiction:

Ease of operationVSDevice complexity

Solution Approach 1:

The system performs preliminary analysis of customer-requested payment dates against earned premium curves and regulatory requirements before finalizing the schedule. This advance checking prevents compliance issues and reduces the need for later adjustments, thereby managing complexity proactively while maintaining customer service quality

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system provides feedback to customers when their requested payment dates would violate earned premium curve requirements or regulatory notice periods. This feedback mechanism guides customers to select acceptable dates, simplifying the overall management process while preserving customer flexibility within compliant boundaries

Inventive Principle:

Principle #23Feedback

2Reliability

If payment dates are adjusted to stay ahead of the earned premium curve, then financial compliance is improved, but customer convenience and satisfaction deteriorate

Engineering Contradiction:

Improvefinancial complianceVSAvoidcustomer convenience

Core Design Contradiction:

ReliabilityVSEase of operation

Solution Approach 1:

The system dynamically adjusts payment schedules based on the specific policy duration, premium amount, and earned premium curve characteristics. Rather than applying fixed rigid schedules, the system adapts the timing to each customer's situation, maintaining financial compliance while maximizing customer convenience within regulatory constraints

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

The system changes key parameters such as the number of payment installments, the spacing between payments, and the specific due dates based on the requested payment date and policy characteristics. This flexible parameter adjustment allows the system to meet both compliance requirements and customer preferences

Inventive Principle:

Principle #35Parameter changes

3Reliability

If short bill or double bill procedures are used to get ahead of the earned premium curve, then financial compliance is improved, but customer understanding and trust deteriorate

Engineering Contradiction:

Improvefinancial complianceVSAvoidcustomer understanding

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The system performs preliminary calculations to determine the exact payment schedule that will result in being ahead of the earned premium curve by the end of the policy period. By planning the entire schedule in advance rather than using ad-hoc short billing or double billing, the system maintains transparency and customer understanding

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system automatically generates and communicates the payment schedule to customers, explaining how their payments align with the earned premium curve. This self-service approach reduces confusion by providing clear, consistent information without requiring complex customer service interventions

Inventive Principle:

Principle #25Self-service

4Reliability

If mandatory notice periods are observed for bank account withdrawals, then regulatory compliance is improved, but flexibility in setting payment dates deteriorates

Engineering Contradiction:

Improveregulatory complianceVSAvoidpayment date flexibility

Core Design Contradiction:

ReliabilityVSAdaptability or versatility

Solution Approach 1:

The system adds the time dimension of notice periods to the payment scheduling process. By calculating backwards from the desired payment date to ensure adequate notice is provided, the system maintains both regulatory compliance and payment date flexibility, allowing customers to choose from a broader range of acceptable dates

Inventive Principle:

Principle #17Another dimension (Dimensionality change)

Data Source

PatentUS8346579B1Systems and methods for supporting extended pay date options on an insurance policy

Publication Date: 2013.01.01 UNITED SERVICES AUTOMOBILE ASSOCIATION (USAA)

AI summary

A recurring automatic payment date may be set for an insurance policy premium based on customer preference. A server may receive a customer-specified day of a month and/or a request for bimonthly withdrawals, such as may be entered via a user interface on an insurance company webpage. The customer specified day(s) may be analyzed against data associated with the insurance policies to determine whether the day is disallowed. The day may be disallowed, for example, because it would result in falling behind an earned premium curve and thereby require a double bill or short bill to stay ahead of the earned premium curve.