Property Risk Score Calculation for Insurance Underwriting
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Solution Overview
Problem
Current property insurance inspection data processing systems lack cumulative analysis, leading to inconsistent and incorrect underwriting referrals and insurance coverage determinations, as they primarily rely on binary decisions and subjective judgments rather than objective assessment of multiple factors.
Innovation Solution
A method and system that receive property data to determine a risk score reflecting the cumulative effect of various attributes, facilitating insurance coverage determination by generating categories based on this score, and supporting decisions such as policy availability, pricing, and underwriting referrals.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If property inspection data is processed using binary decisions and subjective judgments, then the processing is simple and quick, but the accuracy and consistency of underwriting referrals deteriorate
Solution Approach 1:
The patent transforms the processing approach from binary decisions (yes/no flags for each property characteristic) to a continuous risk score parameter. Multiple property characteristics are converted into weighted numerical values that contribute to an overall risk score, enabling more nuanced and accurate risk assessment while maintaining automated processing efficiency.
Solution Approach 2:
The patent introduces a risk score as an intermediary between raw property inspection data and underwriting decisions. This intermediary parameter aggregates multiple property characteristics through weighted scoring, providing a consistent objective basis for underwriting referrals that improves accuracy while preserving processing speed.
2Ease of operation
If multiple property characteristics are assessed individually with binary flags, then the data collection is straightforward, but the cumulative risk assessment capability is lost
Solution Approach 1:
The patent merges multiple individual property characteristic assessments into a unified risk score. Each property characteristic (roof condition, siding condition, age, etc.) is assigned a weighted value based on its risk significance, and these values are combined to produce an overall risk score that reflects cumulative risk accurately.
Solution Approach 2:
The patent transforms discrete binary flags into continuous weighted parameters. Instead of treating each property characteristic as a simple yes/no flag, the system assigns numerical weights that reflect the relative importance and risk contribution of each characteristic, enabling accurate cumulative risk assessment.
3Adaptability or versatility
If manual assessment of inspection data is performed, then subjective judgment can be applied, but consistency and objectivity of coverage determinations deteriorate
Solution Approach 1:
The patent implements a standardized feedback mechanism where property characteristics are systematically evaluated against predetermined weightings and scoring criteria. This structured approach ensures that the same assessment rules are applied consistently across all properties, eliminating variability introduced by subjective human judgment while maintaining objectivity.
Solution Approach 2:
The patent converts subjective judgment into objective parameter-based assessment. By assigning numerical weights to property characteristics and calculating risk scores through standardized formulas, the system achieves consistent and reproducible coverage determinations that are free from human subjectivity.
Data Source
AI summary
Disclosed herein is a method of facilitating an insurance coverage determination for a property based on a plurality of characteristic elements relevant to the insurance coverage determination. The method includes receiving property data indicative of attributes of the property for the plurality of characteristic elements, determining a property risk score for the property based on the property data, and supporting the insurance coverage determination with the property risk score.