Researchers Submit Patent Application, “Computer-Implemented Method And System For Determining A Protection Level And Optimal Insurance Cover”, for Approval (USPTO 20230334579): Patent Application
2023 NOV 07 (NewsRx) -- By a
No assignee for this patent application has been made.
News editors obtained the following quote from the background information supplied by the inventors: “It can be difficult for a client to ascertain the appropriate level of protection, or cover, required when taking out an insurance product. For instance, when taking out life insurance, the client may struggle to determine the appropriate benefits to have included in the policy (e.g. cover against death, illness, disability and the like) as well as the appropriate monetary value to select for each benefit. This difficulty is caused by a number of factors, including (but not limited to) the large number of different products, benefits and options available in the market, their nuanced features, varying and often technical claim definitions, intricate terms and conditions, as well as the client’s uncertainty as to their own needs and requirements.
“Given the complex and/or time-consuming nature of this exercise, clients often instruct financial advisers to assist them in determining the level of cover required and/or in taking out the appropriate insurance products on their behalf. However, a problem with this approach is that, on the one hand, the client typically does not know how to calculate their financial and insurance needs, while on the other hand, the financial adviser may lack the information and time (and sometimes the skill) required to calculate these financial and insurance needs. Due to this information asymmetry, the client cannot be sure that their financial and insurance needs are correctly and fully protected.
“Relying on financial advisers to provide the correct amount, type of cover and benefits is also problematic in light of the incentives that usually exist for financial advisers to up-sell (and potentially mis-sell) to clients. In many cases, a financial adviser’s income is directly linked to both the amount of business they can secure and the size of the policies they sell. This means that the more they sell and/or the bigger the policies, the higher their income. As a result, there is a risk that financial advisers may de-prioritise the quality of their advice given the limited time they have with clients, instead focusing the majority of their time on selling and not providing optimal or near-optimal advice. This may also introduce unwanted bias or subjectivity into the process.
“Even when a financial adviser does manage to calculate the client’s financial and insurance needs fairly accurately (e.g. the financial adviser takes the time to consult with the client, obtain the required information and understand the client’s needs in order to make a suitable calculation), the nature of many of the insurance products in the market remains a stumbling block. The Inventors have found that most insurance products have remained structurally unchanged over the past few decades or even longer. In particular, products and the cover they provide are generally static and fail to evolve with a client’s changing needs over time. As a result, many clients may face a cover shortfall during a policy term unless a financial adviser recalculates and adjusts their cover periodically. However, this is currently a time-consuming and cumbersome process. Furthermore, if it turns out that a client’s needs have reduced, the adviser may be discouraged from lowering their cover, as that could in turn have a negative impact on the adviser’s income.
“As a result of these and other issues, there may be a gap between a client’s actual level of protection and the level of protection they would need if an insured event were to occur, and this gap may become progressively wider as the policy term advances. In
“Current technical systems used by insurers to calculate premiums and manage policies suffer from technical problems. In particular, these systems are in the Inventors’ experience not capable of appropriately calculating or estimating a protection level of a client at a given point in time, and appropriately calculating or estimating the optimal cover for the client based on the protection level and/or the financial means of the client. Accordingly, embodiments of the present invention aim to provide a technical solution capable of addressing the above issues, at least to some extent.”
As a supplement to the background information on this patent application, NewsRx correspondents also obtained the inventors’ summary information for this patent application: “Broadly, in accordance with the invention, there is provided a computer-implemented method of determining a protection level of a client, the method comprising:
“receiving and/or accessing, by at least one computer, current cover data for at least one current insurance policy associated with the client;
“generating, by a processor associated with the at least one computer, benchmark cover data associated with proposed insurance cover for the client;
“comparing, by the processor, the current cover data with the benchmark cover data in order to determine a protection level of the client;
“generating, by the at least one computer, protection level data based on the comparison between the current cover data and the benchmark cover data; and
“generating, by the at least one computer, output indicative of the protection level and/or the protection level data.
“Broadly, in accordance with the invention, there is also provided a computer-implemented method of determining optimal insurance cover for a client, the method comprising:
“receiving and/or accessing, by at least one computer, input data in respect of a possible insurance policy, the input data including at least one benefit and a premium indicated by the client as being affordable;
“generating, by a processor associated with the at least one computer, benchmark cover data associated with the possible insurance policy;
“calculating, by the processor, a maximum protection level obtainable by the client based on the input data and the benchmark cover data, wherein the maximum protection level is a portion or a percentage of a benchmark cover amount or benchmark cover level forming part of the benchmark cover data;
“generating, by the at least one computer, optimal cover data based on the maximum protection level; and
“generating, by the at least one computer, output indicative of the optimal cover data and/or maximum protection level.
“More specifically, in accordance with the invention, there is provided a computer-implemented method of determining a protection level and optimal insurance cover for a client, the method comprising:
“receiving and/or accessing, by at least one computer, current cover data for at least one current insurance policy associated with the client or input data in respect of a possible insurance policy for the client, the current cover data including at least one benefit, and the input data including at least one benefit and a premium indicated by the client as being affordable;
“generating, by a processor associated with the at least one computer, benchmark cover data associated with proposed insurance cover for the client;
“comparing, by the processor, the current cover data or the input data with the benchmark cover data in order to determine a protection level of the client, wherein the protection level is a portion or a percentage of a benchmark cover amount or benchmark cover level forming part of the benchmark cover data;
“generating, by the processor, protection level data based on the comparison between the current cover data or the input data and the benchmark cover data, wherein, in the case of a comparison between the input data and the benchmark cover data, the protection level data includes optimal cover data indicative of a maximum protection level obtainable by the client based on the comparison between the input data and the benchmark cover data, the premium affordable to the client being insufficient for the client to obtain the benchmark cover amount or benchmark cover level; and
“generating, by the at least one computer, output indicative of the protection level data or the optimal cover data.
“The current cover data may include data on one or more benefits. For each benefit, the current cover data may include a benefit cover amount. The processor may be configured to calculate the/each benefit cover amount.
“The current cover data may include a current cover amount associated with the one or more insurance policies. The current cover amount may be the sum of or otherwise be indicative of or takes into account all of the benefit cover amounts in cases where the current cover data relates to a plurality of benefits. The processor may be configured to calculate the current cover amount.
“The possible insurance policy may include a plurality of benefits. In such a case, the method may include determining a protection level per unit of premium for each benefit and giving preference to the benefit/s with a highest protection level per unit of premium so as to the maximise the protection level obtainable for the premium affordable to the client.
“The benchmark cover data may include, for each benefit, a proposed protection level. In calculating the maximum protection level, only the benefit/s with the highest protection level per unit may be considered until the proposed protection level is reached for such benefit/s, before considering the benefit/s with lower protection levels per unit of premium.
“The benchmark cover data may include a benchmark cover amount. The step of generating the benchmark cover data/amount may involve a calculation substantially as described in the Applicant’s South African Provisional Patent Application No. 2020/05735 entitled “COMPUTER-IMPLEMENTED METHOD AND SYSTEM FOR DYNAMICALLY ADJUSTING INSURANCE COVER AND AN INSURANCE PREMIUM”, the contents of which is incorporated by reference herein.
“The benchmark cover data/amount may thus be calculated using a “needs-matched protection” or “pay-as-you-need” algorithm that determines the required protection based on the client’s needs at a particular point/period in time and dynamically adjusts as needs of the client change over time. As described in South African Patent Application No. 2020/05735, this algorithm projects the coverage needed for a client at different points/stages in their life, utilising a large number of personalised and economic data points. The output of this process may be used as the “benchmark” referred to herein, allowing the client to determine their true level of protection against this benchmark.
“Accordingly, the method may include generating, by the processor, the benchmark cover amount using a needs-matched algorithm which assesses a financial need of the client which would result from the occurrence of an insured event during a specific period.
“However, any other suitable “benchmark” may be used or proposed by the insurer depending on the insurance cover it proposes to the client and the Applicant’s needs-matched protection” or “pay-as-you-need” algorithm is an example only. The “current” cover data may relate to a selected policy or to an actual policy currently held by the client.
“The method may further include allocating a weighting to each benefit (in cases where a plurality of benefits is assessed). Calculating the current cover amount may include allocating a weighting to each benefit and aggregating the benefits accordingly to arrive at the current cover amount. The benchmark cover amount may consist of a number of individual benchmark benefit amounts, each associated with one of the benefits in question. Calculating the benchmark cover amount may include allocating a weighting to each benefit, being the same weighting used during the current cover amount calculation, and aggregating the benefits accordingly to arrive at the benchmark cover amount.
“The comparison between the current cover data and the benchmark cover data may include comparing the current cover amount with the benchmark cover amount, as calculated by the processor.
“Generating the protection level data may include expressing the current cover amount as a percentage, fraction, portion or level of or relative to the benchmark cover amount.
“Generating the protection level data may include generating a summary statistic providing an overview of the current cover data compared to the benchmark cover data or an overview of the maximum protection level obtainable for the premium affordable to the client. This may be the output referred to above.
“The insurance policy or policies assessed may include one or more of life cover, disability cover, income protection, illness cover, health insurance, general or short term cover, or the like.
“In some embodiments, the at least one computer may be configured to carry out the “protection level calculation” (i.e. determining the protection level of the client) again each time there is a change in either the benchmark cover or current cover. The at least one computer may be configured to detect such a change and to recalculate the protection level, as described above, in response to the change.
“Broadly, in accordance with the invention there is also provided a system for determining a protection level of a client, the system comprising at least one computer and a processor, the system being configured to:
“receive and/or access current cover data for at least one current insurance policy associated with the client;
“generate, using the processor, benchmark cover data associated with proposed insurance cover for the client;
“compare, using the processor, the current cover data with the benchmark cover data in order to determine a protection level of the client;
“generate protection level data based on the comparison between the current cover data and the benchmark cover data; and
“generate output indicative of the protection level and/or the protection level data.
“Broadly, in accordance with the invention there is also provided a system for determining optimal insurance cover for a client, the system comprising at least one computer and a processor, the system being configured to:
“receive and/or access input data in respect of a possible insurance policy, the input data including at least one benefit and a premium indicated by the client as being affordable;
“generate, using the processor, benchmark cover data associated with the possible insurance policy;’
There is additional summary information. Please visit full patent to read further.”
The claims supplied by the inventors are:
“1. A computer-implemented method of determining a protection level and optimal insurance cover for a client, the method comprising: receiving and/or accessing, by at least one computer, current cover data for at least one current insurance policy associated with the client or input data in respect of a possible insurance policy for the client, the current cover data including at least one benefit, and the input data including at least one benefit and a premium indicated by the client as being affordable; generating, by a processor associated with the at least one computer, benchmark cover data associated with proposed insurance cover for the client; comparing, by the processor, the current cover data or the input data with the benchmark cover data in order to determine a protection level of the client, wherein the protection level is a portion or a percentage of a benchmark cover amount or benchmark cover level forming part of the benchmark cover data; generating, by the processor, protection level data based on the comparison between the current cover data or the input data and the benchmark cover data, wherein, in the case of a comparison between the input data and the benchmark cover data, the protection level data includes optimal cover data indicative of a maximum protection level obtainable by the client based on the comparison between the input data and the benchmark cover data, the premium affordable to the client being insufficient for the client to obtain the benchmark cover amount or benchmark cover level; and generating, by the at least one computer, output indicative of the protection level data or the optimal cover data.
“2. The method according to claim 1, wherein the current cover data includes a current cover amount, and in the case of a comparison between the current cover data and the benchmark cover data, generating, by the processor, the protection level data includes expressing the current cover amount of the client as a percentage, fraction, portion or level of or relative to the benchmark cover amount.
“3. The method according to claim 2, wherein the current cover data includes a plurality of benefits, each benefit including a benefit cover amount, wherein the processor is configured to calculate each benefit cover amount, and wherein the current cover amount is indicative of or takes into account all of the benefit cover amounts.
“4. The method according to claim 3, wherein the current cover amount is calculated by the processor by allocating a weighting to each benefit and aggregating the benefits accordingly to arrive at the current cover amount, wherein the benchmark cover amount consists of a number of individual benchmark benefit amounts, each associated with one of the benefits, and wherein the benchmark cover amount is calculated by the processor by allocating a weighting to each benefit, being the same weighting used during calculation of the current cover amount, and aggregating the benefits accordingly to arrive at the benchmark cover amount.
“5. The method according to claim 1, wherein in the case of a comparison between the input data and the benchmark cover data, generating, by the processor, the protection level data includes calculating, by the processor, the maximum protection level obtainable by the client based on the input data and the benchmark cover data, wherein the maximum protection level is a portion or a percentage of the benchmark cover amount or benchmark cover level forming part of the benchmark cover data.
“6. The method according to claim 5, wherein the possible insurance policy includes a plurality of benefits, and the method includes determining, by the processor, a protection level per unit of premium for each benefit, the processor being configured to give preference to the benefit/s with a highest protection level per unit of premium in generating the protection level data so as to the maximise the maximum protection level obtainable for the premium affordable to the client.
“7. The method according to claim 6, wherein the benchmark cover data includes, for each benefit, a proposed protection level, and wherein the processor is configured such that, in calculating the maximum protection level, only the benefit/s with the highest protection level per unit will be considered until the proposed protection level is reached for such benefit/s, before considering the benefit/s with a lower protection level per unit of premium.
“8. The method according to claim 1, which includes transmitting the output to a communications device of the client, wherein the output includes a summary statistic providing an overview of the current cover data compared to the benchmark cover data or an overview of the maximum protection level obtainable for the premium affordable to the client.
“9. The method according to claim 1, which includes calculating, by the processor, the benchmark cover amount or benchmark cover level using a needs-matched algorithm which assesses a financial need of the client which would result from the occurrence of an insured event during a specific period.
“10. A system for determining a protection level and optimal insurance cover for a client, the system comprising at least one computer and a processor, the system being configured to: receive and/or access current cover data for at least one current insurance policy associated with the client or input data in respect of a possible insurance policy for the client, the current cover data including at least one benefit, and the input data including at least one benefit and a premium indicated by the client as being affordable; generate, by the processor, benchmark cover data associated with proposed insurance cover for the client; compare, by the processor, the current cover data or the input data with the benchmark cover data in order to determine a protection level of the client, wherein the protection level is a portion or a percentage of a benchmark cover amount or benchmark cover level forming part of the benchmark cover data; generate, by the processor, protection level data based on the comparison between the current cover data or the input data and the benchmark cover data, wherein, in the case of a comparison between the input data and the benchmark cover data, the protection level data includes optimal cover data indicative of a maximum protection level obtainable by the client based on the comparison between the input data and the benchmark cover data, the premium affordable to the client being insufficient for the client to obtain the benchmark cover amount or benchmark cover level; and generate output indicative of the protection level data or the optimal cover data.
“11. The system according to claim 10, wherein the current cover data includes a current cover amount, and in the case of a comparison between the current cover data and the benchmark cover data, the processor is configured to express the protection the current cover amount of the client as a percentage, fraction, portion or level of or relative to the benchmark cover amount.
“12. The system according to claim 11, wherein the current cover data includes a plurality of benefits, each benefit including a benefit cover amount, wherein the processor is configured to calculate each benefit cover amount, and wherein the current cover amount is indicative of or takes into account all of the benefit cover amounts.
“13. The system according to claim 12, wherein the processor is configured to calculate the current cover amount by allocating a weighting to each benefit and aggregating the benefits accordingly to arrive at the current cover amount, wherein the benchmark cover amount consists of a number of individual benchmark benefit amounts, each associated with one of the benefits, and wherein the processor is configured to calculate the benchmark cover amount by allocating a weighting to each benefit, being the same weighting used during calculation of the current cover amount, and aggregating the benefits accordingly to arrive at the benchmark cover amount.
“14. The system according to claim 10, wherein in the case of a comparison between the input data and the benchmark cover data, the processor is configured to generate the protection level data by calculating the maximum protection level obtainable by the client based on the input data and the benchmark cover data, wherein the maximum protection level is a portion or a percentage of the benchmark cover amount or benchmark cover level forming part of the benchmark cover data.
“15. The system according to claim 14, wherein the possible insurance policy includes a plurality of benefits, the processor being configured to determine a protection level per unit of premium for each benefit, the processor further being configured to give preference to the benefit/s with a highest protection level per unit of premium in generating the protection level data so as to the maximise the maximum protection level obtainable for the premium affordable to the client.
“16. The system according to claim 15, wherein the benchmark cover data includes, for each benefit, a proposed protection level, and wherein the processor is configured such that, in calculating the maximum protection level, only the benefit/s with the highest protection level per unit will be considered until the proposed protection level is reached for such benefit/s, before considering the benefit/s with a lower protection level per unit of premium.
“17. The system according to claim 16, which is configured to transmit the output to a communications device of the client, wherein the output includes a summary statistic providing an overview of the current cover data compared to the benchmark cover data or an overview of the maximum protection level obtainable for the premium affordable to the client.”
There are additional claims. Please visit full patent to read further.
For additional information on this patent application, see: GILL,
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