Smart Contract Generation in Distributed Ledger for Claims Subrogation

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

The insurance industry faces inefficiencies and high costs in claims subrogation and salvage processing due to manual intensive processes and security concerns related to third-party access to sensitive data.

Innovation Solution

A secure platform utilizing a private distributed ledger (blockchain) with smart contracts to automate and facilitate interparty transactions, such as claim subrogation and salvage processing, ensuring secure, efficient, and resource-effective processing by leveraging digital assets and electronic identity validation.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If manual processing is used for claims subrogation and salvage processing, then flexibility in handling complex cases is maintained, but processing time and costs increase significantly

Engineering Contradiction:

Improveprocessing speedVSAvoidsystem complexity

Core Design Contradiction:

ProductivityVSDevice complexity

Solution Approach 1:

The smart contract system enables self-service processing where the contract automatically executes claims subrogation and salvage processing without requiring manual intervention. The system performs validation, calculation, and settlement automatically based on predefined conditions, thereby increasing processing speed while reducing the need for complex manual procedures.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The patent replaces manual mechanical processing with an automated digital system. Traditional manual claims processing is substituted by smart contracts that automatically execute on a distributed ledger, eliminating the need for manual paperwork, physical calculations, and human-mediated transactions, thus significantly improving productivity.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Reliability

If third parties have access to secure data during claims processing, then transparency and oversight are improved, but security risks and unauthorized access increase

Engineering Contradiction:

Improvedata securityVSAvoidunauthorized access

Core Design Contradiction:

ReliabilityVSObject-affected harmful factors

Solution Approach 1:

The distributed ledger system implements local quality by providing different levels of access to different participants. Each party can access and verify data relevant to their specific claim, while the system maintains overall security through encryption and permissioned access controls. This allows transparency for authorized parties while protecting sensitive data from unauthorized access.

Inventive Principle:

Principle #3Local quality

Solution Approach 2:

The smart contract acts as an intermediary between parties, managing data access and transaction execution securely. The contract mediates by automatically validating claims and executing settlements based on predefined conditions, reducing the need for third-party access to sensitive data while maintaining transparency and oversight through the distributed ledger.

Inventive Principle:

Principle #24Intermediary (Mediator)

3Productivity

If automated smart contract processing is implemented, then processing efficiency and cost reduction are achieved, but implementation complexity and initial setup requirements increase

Engineering Contradiction:

Improveprocessing efficiencyVSAvoidimplementation ease

Core Design Contradiction:

ProductivityVSEase of manufacture

Solution Approach 1:

The smart contract platform is designed with multi-functionality to handle various claims subrogation and salvage processing scenarios through a single unified system. The platform can process different types of claims, validate various data formats, and execute diverse settlement methods, thereby improving processing efficiency while reducing the need for multiple separate systems and simplifying implementation.

Inventive Principle:

Principle #6Universality (Multi-functionality)

4Loss of information

If distributed ledger technology is used, then data transparency and immutability are improved, but system complexity and computational requirements increase

Engineering Contradiction:

Improvedata integrityVSAvoidsystem architecture

Core Design Contradiction:

Loss of informationVSDevice complexity

Solution Approach 1:

The distributed ledger system segments data storage and processing across multiple nodes in the network. Each node maintains a copy of the ledger, and transactions are processed and validated independently by individual nodes before being added to the chain. This segmentation improves data integrity through redundancy and immutability while distributing computational requirements to reduce complexity at any single point.

Inventive Principle:

Principle #1Segmentation

Data Source

PatentUS11829961B1Smart contract generation and execution in a distributed ledger environment

Publication Date: 2023.11.28 LIBERTY MUTUAL INSURANCE CO

AI summary

An apparatus comprising a communications interface configured to communicate over one or more networks, at least one processor and at least one memory including program code is provided. The at least one memory and the program code configured to, with the processor, cause the apparatus to at least receive, via the communications interface, an interparty transaction request. The interparty transaction request corresponds to an interparty transaction and identifying a first party and a second party. The apparatus generates a smart contract based on the interparty transaction request; stores a data entry indicating the generation of the smart contract to a distributed ledger; executes the smart contract to cause settlement of the interparty transaction between the first party and the second party; and stores a data entry indicating the settlement of the interparty transaction to the distributed ledger.