Insurance Quote System Using Assumption-Based Risk Assessment
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Solution Overview
Problem
Existing online insurance quote systems require extensive and time-consuming information gathering from customers, making it burdensome for them to receive accurate premium estimates, which hinders efficient comparison shopping.
Innovation Solution
A system utilizing unique assumptions based on existing customer data to reduce the amount of information needed, incorporating a mainframe computer system, application server, and external rules management system to provide an estimated premium through a graphic user interface, allowing for quick risk assessment and quote calculation with minimal customer input.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If extensive information gathering and manual underwriting processes are used, then accurate insurance quotes can be provided, but the process becomes time-consuming and burdensome for customers
Solution Approach 1:
The system performs preliminary actions by pre-calculating assumptions about customer characteristics (age, location, driving habits) and storing them in a database. When a customer requests a quote, the system retrieves these pre-prepared assumptions and applies them immediately, eliminating the need for extensive real-time questioning while maintaining quote accuracy.
Solution Approach 2:
The system creates simplified copies of the traditional underwriting process by using predetermined assumptions that replicate the decision-making patterns of human underwriters. These assumption-based quotes are generated rapidly without requiring customers to complete lengthy applications, thus reducing time loss while preserving accuracy.
2Reliability
If comprehensive customer information is collected through extensive questioning, then reliable risk assessment can be performed, but customer convenience and ease of operation deteriorate
Solution Approach 1:
The system extracts only the essential information needed for risk assessment from the full set of potential customer data points. By using predetermined assumptions about common customer characteristics, the system removes the need for customers to provide extensive personal, financial, and driving history information, thereby improving ease of operation while maintaining reliable risk assessment through the assumption-based modeling.
Solution Approach 2:
The system changes the parameters of customer interaction by transitioning from a model requiring detailed explicit customer inputs to one using predetermined assumptions. This parameter change allows the system to maintain reliable risk assessment through comprehensive assumption coverage while dramatically reducing the operational burden on customers.
3Loss of information
If traditional online quoting systems require customers to review and respond to dozens of questions, then detailed underwriting information can be gathered, but productivity and efficiency of the quoting process decrease
Solution Approach 1:
The system performs preliminary action by pre-establishing comprehensive assumptions covering all major underwriting factors (driver age, location, vehicle type, coverage limits) before customer interaction. This allows rapid quote generation while maintaining information completeness, as the assumptions are designed to capture all essential underwriting dimensions without requiring real-time customer responses.
Solution Approach 2:
The assumption-based system serves multiple underwriting functions simultaneously - risk assessment, pricing calculation, and quote generation - all through a unified assumption framework. This multi-functionality eliminates the need for separate information gathering steps for each underwriting consideration, thereby increasing productivity while preserving information completeness.
Data Source
AI summary
The present invention provides a system and method capable of providing an estimated premium without extensive and repetitive questioning. The present invention utilizes unique assumptions to dramatically reduce the amount of information that must be provided by the customer. In one embodiment, the present invention utilizes a mainframe computer system, an application server, and an external rules management system to interact with the customer via an attractive graphic user interface. Once logged onto the website of the present invention, the customer may choose to engage in a fast quote process which utilizes assumptions, driver information, and vehicle information to assess the risk associated with insuring the customer and then calculates an estimated cost to insure.