“Methods And Systems For Managing Digital Groups And Claim Allocations In Digital A Peer-To-Peer Insurance Network” in Patent Application Approval Process (USPTO 20220005123): Patent Application

2022 JAN 20 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A patent application by the inventors Ngulube, Ndabenhle (Sandton, ZA); Smith, Matthew (Sandton, ZA); Van Heerden, Marnus (Johannesburg, ZA), filed on January 6, 2020, was made available online on January 6, 2022, according to news reporting originating from Washington, D.C., by NewsRx correspondents.

This patent application has not been assigned to a company or institution.

The following quote was obtained by the news editors from the background information supplied by the inventors: “The concept of a cell captive arrangement is well-known in the insurance industry. Essentially, in a cell captive arrangement, a participant chooses to self-insure by forming or becoming part of a so-called cell within a larger insurance group. Each cell is typically ring-fenced, i.e. no cross-subsidization is allowed, and each cell must usually be individually solvent.

“In the Inventors’ experience, cell captives are established manually and on a case-by-case basis. In other words, each cell captive has its own set of rules. In the cell captives of which the Inventors are aware, members contribute approximately the same quantum and risk type to a pool associated with the cell captive. Some of these systems rely on step-based rules, e.g. for a group of up to 30 members, 10% of each member’s premium is allocated to savings and the other 90% is allocated to insurance, for a group of more than 30 and up to 50 members, 20% of each member’s premium is allocated to savings and the other 80% is allocated to insurance, and so forth.

“The Inventors have found that current methods of establishing and operating cell captives have several limitations and/or drawbacks.

“Firstly, cell captives are usually governed by ad hoc rules and relatively complicated structures, as such, there is no general system that is available to members of the public to form their own cell captives. Secondly, existing arrangements are relatively rigid and do not make enough provision for different risk types, risk profiles, group sizes, and the like. Furthermore, existing systems may require significant manual (i.e., human) administration which may be difficult and/or time-consuming. These issues may reduce the appeal of cell captives and/or may prohibit large-scale consumer adoption.

“Embodiments of the present invention aim to address the above issues, at least to some extent.”

In addition to the background information obtained for this patent application, NewsRx journalists also obtained the inventors’ summary information for this patent application: “According to one aspect of the invention, there is provided a computer-implemented method of managing a digital group in a digital peer-to-peer insurance network, the digital network including a plurality of members each having a member account, wherein the method comprises: establishing, e.g., by a group establishing module or other module or logic, a digital group which is configured to include a subset of the members of the digital network; adding, e.g., by a group administration module or other module or logic, a member of the network to the group by associating the member account of the member with the group; determining, e.g., by a risk factor module or other module or logic, for the member account of the member added to the group, a group risk factor and a network risk factor, these factors are used to determine liability of the new group member account in the event of a claim originating from a member account which forms part of the same group (in-group claimant), and determine the liability of the new member account in the event of a claim originating from a member account which does not form part of the same group (non-group claimant); in some embodiments, the group risk factor may be used to determine liability of the member account in the event of a claim originating from a member account which forms part of the group, and wherein the network risk factor is used to determine liability of the member account in the event of a claim originating from a member account which does not form part of the group; and adjusting, by the risk factor module, the group risk factor and/or the network risk factor of the member of the group in response to another member being added to or leaving the group or network, or in response to a change in risk associated with a member account in the group.

“The method may include determining a “group risk factor” and/or a “network risk factor” for the member account of each member of the group. The method may include, in response to a new member being added to the group, determining a group risk factor and/or a network risk factor for the member account of the new member and adjusting the group risk factor and/or network risk factor of the member account of each other member of the group. In response to a member leaving the group, the group risk factor and/or network risk factor of the member account of each of the remaining members of the group may be adjusted. Likewise, group and network risk factors may be adjusted in response to risk being added or reduced by a member of the group (i.e. in response to a change in risk associated with a member account).

“The group risk factor may be determined by aggregating with weightings a general risk weighting of the member account of a member with the “general risk weighting” of one or more of the member accounts of members who are part of the group. An “additional risk weighting” may be added to the general risk weighting to arrive at the group risk factor. In some embodiments, the general risk weighting may be adjusted by the group risk factor increase and network risk factor decrease to provide an adjusted general risk weighting for the member.

“The additional risk weighting may be determined based on risk weightings of one or more other member accounts of the group, e.g., based on relative risk weightings in the group.

“The network risk factor may be determined by aggregating with weightings the general risk weightings of all member accounts in the network and deducting the group risk factor from this aggregation.

“In some embodiments, a “risk weighting deduction” may be applied to arrive at the network risk factor and the “additional risk weighting” referred to above may, in some embodiments, be substantially equal but opposite to the “risk weighting deduction”.

“The member accounts may be digital electronic wallets (or e-wallets) used in the digital peer-to-peer insurance network. The “general risk weighting” for a particular member account may be a risk weighting based on one or more factors, such as a premium paid into the wallet and/or an item insured, and/or a sum insured (level of coverage for the item insured) and/or any other measure of risk.

“The adjusting step may include, for each new member added to the group or each additional risk added by existing members of the group, allocating a “risk weighting deduction” to the network risk factors of the members of the group and adding an “additional risk weighting” to the group risk factors of the members of the group.

“The method may include determining, an independence level of the group. The independence level may be determined based on a level of exposure of members of the group to claims originating from member accounts outside of the group. In some embodiments, the independence level of the group may be adjusted in a linear fashion from 0 or close to 0 to a maximum at which the group is designated a full cell captive.

“The method may include linearly increasing the group risk factor of a member’s account and linearly decreasing the network risk factor of a member’s account, by the risk factor module, as more member accounts are added to the group or additional risk is added by existing member accounts of the group. In this way, the independence level of the group may be adjusted linearly and when maximized, the group may form a cell captive.

“In some embodiments, therefore, once the group has sufficient members, the network risk factors of the member accounts of the group may be zero, indicating that the group is self-sustaining and able to function as a cell captive within the network. The independence level may then be designated as having reached the maximum, e.g., a level of 100/100%.

“The method may include identifying and/or measuring, by the group administration module and/or the risk factor module, that the independence level of the group has reached the maximum, or cell captive state.

“Until the maximum independence level is reached, as the group grows in size, there may be a gradual, e.g., linear, transfer towards it where the member of the group is partially exposed to a general community of the network and partially exposed to group.

“The method may include determining, e.g., by a group administration module and/or a risk factor module or other module/logic, a level of liability of each member of the group for a claim originating from a member account which does form part of the group and originating from a member account which does not form part of the group, respectively, based on the independence level of the group, and in the event of a claim originating from a member account which does form part of the group, the group administration module and/or the risk factor module may increase the liability of the member of the group for this claim as the independence level of the group grows, and in the event of a claim originating from a member account which does not form part of the group, the group administration module and/or the risk factor module may decrease the liability of the member of the group for this claim as the independence level of the group grows.

“The method may include storing the member accounts of the members of the group in association with each other in the database.

“The functionality of one or more of the modules or logic described herein, e.g., the group establishing module, the group administration module and/or the adjusting module, may be provided by a server, e.g., a remotely accessible server. The server may include a server computer or a cluster of computers, or any suitable computer system or systems, which may be in the same or different locations.

“Communications between members of the network and the server may be carried out via a web-based platform or other communication network. The platform may be provided by a mobile software application, website, or the like. Communications may also be carried out using native mobile software.

“According to another aspect of the invention, there is provided a system for managing a digital group in a digital peer-to-peer insurance network, the digital network including a plurality of members each having a digital member account, wherein the system includes a server which comprises: a group establishing module for establishing a group which is configured to include a subset of the members of the network; a group administration module for adding a member of the network to the group by associating the member account of the member with the group; and a risk factor module for determining, for the member account of the member added to the group, a group risk factor and a network risk factor, wherein the group risk factor is used to determine liability of the member account in the event of a claim originating from a member account which forms part of the group, and wherein the network risk factor is used to determine liability of the member account in the event of a claim originating from a member account which does not form part of the group, wherein the risk factor module is configured to adjust the group risk factor and/or the network risk factor of the member of the group in response to another member being added to or leaving the group or network, or in response to a change in risk associated with a member account in the group.

“The server may include a storing module for storing data relating to the member accounts in a database. The system may include or be communicatively coupled to the database.

“According to a further aspect of the invention, there is provided a computer program product including at least one computer-readable medium having stored thereon at least one computer program which, when executed by a computer or a computerized system, causes the computer or computerized system to perform a method of managing a group in a peer-to-peer insurance network, substantially as described above. The computer-readable medium may be a non-transitory computer-readable medium.”

The claims supplied by the inventors are:

“1. A computer-implemented method of managing a group in a digital peer-to-peer insurance network, the digital peer-to-peer network including a plurality of members each having an electronic member account, comprising: establishing a group comprising a subset of the members of the network; adding a member of the network to the group (new group member) by associating the member account of the new group member (new group member account) with the group; determining, for the new group member account, a group risk factor and a network risk factor, wherein these factors are used to determine liability of the new group member account in the event of a claim originating from a member account which forms part of the same group (in-group claimant), and determine the liability of the new member account in the event of a claim originating from a member account which does not form part of the same group (non-group claimant); and adjusting the group risk factor and the network risk factor of the new group member in response to another member being added to or leaving the group or network, or in response to a change in risk associated with a member account in the group.

“2. The method of claim 1 wherein the determining comprises determining the group risk factor and the network risk factor for the member account of each member of the group.

“3. The method of claim 1 further comprising, in response to a new member being added to the group, determining a group risk factor or a network risk factor for the member account of the new member and adjusting the group risk factor or network risk factor of the member account of each other member of the group.

“4. The method of claim 1, further comprising, in response to a member leaving the group, the group risk factor and/or network risk factor of the member account of each of the remaining members of the group may be adjusted.

“5. The method of claim 1, further comprising, adjusting the group and network risk factors in response to risk being added or reduced by a member of the group (i.e. in response to a change in risk associated with a member account).

“6. The method of claim 1, wherein the group risk factor, for each member of the group, is determined by aggregating with weightings a general risk weighting of the member account of a member with the general risk weighting of one or more of the other member accounts of the other members who are part of the group.

“7. The method of claim 1, wherein the group risk factor comprises an additional risk weighting added to the general risk weighting to arrive at the group risk factor.

“8. The method of claim 7, wherein the additional risk weighting is determined based on risk weightings of one or more other member accounts of the group.

“9. The method of claim 1, wherein the network risk factor is determined by aggregating with weightings the general risk weightings of all member accounts in the network as a network aggregation and deducting the group risk factor from the network aggregation.

“10. The method of claim 7, wherein the network risk factor comprises a risk weighting deduction and the additional risk weighting is substantially equal but opposite to the risk weighting deduction.

“11. (canceled)

“12. The method of claim 1, wherein the general risk weighting for a particular member account is a risk weighting based on one or more factors comprising at least one of: a premium paid into the wallet, a sum (or amount) insured, and a general measure of risk.

“13. The method of claim 1, wherein the adjusting step comprises, for each new member added to the group or each additional risk added by existing members of the group, allocating a risk weighting deduction to the network risk factors of the members of the group and adding an additional risk weighting to the group risk factors of the members of the group.

“14. The method of claim 1, further comprising determining a group independence level of the group based on a level of exposure of group members to non-group claims.

“15. The method of claim 14, wherein the group independence level is adjusted in a linear fashion from about 0 to a maximum independence level at which the group is designated a full cell captive.

“16. (canceled)

“17. (canceled)

“18. The method of claim 15, further comprising identifying that the group independence level has reached the maximum independence level and designating the group as in a cell captive state.

“19. (canceled)

“20. The method of claim 1, further comprising, determining an in-group claim liability level for each member of the group for a claim originating from a member account which forms part of the group based on the independence of a group and increasing this measure as the group independence grows, and conversely, for a non-group claim, determining the liability level of members in the group for a claim originating from a member account which does not form part of the group, based on the independence level of the group, and decreasing the non-group claim liability level of members of the group for the non-group claim as the group independence level grows.

“21. (canceled)

“22. (canceled)

“23. (canceled)

“24. (canceled)

“25. (canceled)

“26. A computer-implemented system for managing a group in a peer-to-peer digital insurance network, the network including a plurality of members each having an electronic member account, wherein the system includes a server, comprising: a group establishing module for establishing a group which is configured to include a subset of the members of the network; a group administration module for adding a member of the network to the group by associating the member account of the member with the group; and a risk factor module for determining, for the member account of the member added to the group, a group risk factor and a network risk factor, a combination of which is used to determine the independence level of the group and thereby the liability of the member account in the event of a claim originating from a member account which forms part of the group, and used to determine liability of the member account in the event of a claim originating from a member account which does not form part of the group, wherein the risk factor module is configured to adjust the group risk factor and/or the network risk factor of the member of the group in response to another member being added to or leaving the group or network, or in response to a change in risk associated with a member account in the group.

“27. (canceled)

“28. (canceled)

“29. (canceled)

“30. (canceled)

“31. A computer-implemented method for managing digital groups and claim allocations in digital a peer-to-peer insurance network the digital peer-to-peer network including a plurality of members each having an electronic member account, comprising: establishing a group comprising a subset of the members of the network, adding a member of the network to the group (new group member) by associating the member account of the new group member (new group member account) with the group; determining, for the new group member account, a member general risk weighting, a group risk factor adjustment and a network risk factor adjustment, wherein the factor adjustments are used to determine liability of the new group member account in the event of a claim originating from within or outside the group; and automatically adjusting the group risk factor adjustment and the network risk factor adjustment of the new group member general risk weighting in response to another member being added to or leaving the group or network, or in response to a change in risk associated with a member account in the group.

“32. The method of claim 31 wherein the general risk weighting is increased by a group risk factor increase and decreased by a network risk factor decrease to provide an adjusted general risk weighting for the member; and further comprising computing a claim liability portion for the member.

“33. The method of claim 31 further comprising, in response to a new member being added to the group, determining a group risk factor and/or a network risk factor for the member account of the new member and adjusting the group risk factor and/or network risk factor of the member account of each other member of the group.”

URL and more information on this patent application, see: Ngulube, Ndabenhle; Smith, Matthew; Van Heerden, Marnus. Methods And Systems For Managing Digital Groups And Claim Allocations In Digital A Peer-To-Peer Insurance Network. Filed January 6, 2020 and posted January 6, 2022. Patent URL: https://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220220005123%22.PGNR.&OS=DN/20220005123&RS=DN/20220005123

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