“Systems and Methods for Efficiently Reinsuring Insurance Policies” in Patent Application Approval Process (USPTO 20220245727): Patent Application

2022 AUG 22 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A patent application by the inventors Frankowiak, Sara (Bloomington, IL, US); Isaacs, Craig Dean (Bloomington, IL, US); McCarty, Jeff (Bloomington, IL, US); Roll, Leif Agerholm (Bloomington, IL, US); Taylor, Kelli (Bloomington, IL, US), filed on June 24, 2020, was made available online on August 4, 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: “Individuals who seek insurance coverage and are sensitive to pricing and product features (e.g., coverage types and/or limits, deductibles, etc.), or “frequent shoppers,” often expend considerable time and effort in finding insurance providers that best meet their needs. Conventionally, a frequent shopper finds an insurance provider by way of an agent/broker, an aggregator, a comparison web site, general web browsing, etc. Once the frequent shopper obtains an insurance policy from the desired provider, the frequent shopper is typically tied to that provider, and to the rate and product features of the policy offered by the provider, until and unless he or she proactively shops around for a new provider offering a policy with a better rate and/or product features. For example, a frequent shopper might decide to look into the offerings of other insurance providers when the frequent shopper’s current policy is up for renewal. Thus, a frequent shopper typically must either spend time and effort looking for a better-priced insurance offering on a recurring basis (e.g., once every six months or annually), or simply renew his or her current policy regardless of whether that policy provides the best rate and/or product features. Conventional agency-based insurance models may not suffice to meet a frequent shopper’s needs, due to the perceived additional cost associated with having an agent.”

In addition to the background information obtained for this patent application, NewsRx journalists also obtained the inventors’ summary information for this patent application: “The present embodiments may, inter alia, automatically provide frequent shoppers with insurance policies that offer superior rates and/or product features on a continuing basis (e.g., across multiple policy terms), thereby reducing or eliminating the time and/or effort that frequent shoppers must spend researching the offerings of different insurance providers, as well as providing frequent shoppers with insurance policies that have lower cost and/or are more reflective of a risk score, characteristics, and/or preferences of the frequent shopper as they change over time. The terms “frequent shopper,” “consumer,” and “customer” are utilized interchangeably herein, and generally refer to a person who is an insured party or a potential insured party, regardless of how frequently that individual in fact would like to shop for insurance coverage or has shopped for insurance coverage in the past. A frequent shopper may be represented by himself or herself, or may be represented by an agent (e.g., by a spouse, a person who has power of attorney for the frequent shopper, an administrative assistant, etc.).

“An intermediary entity may act on behalf of frequent shoppers and/or their agents (i.e., with the consent of the frequent shoppers and/or agents) to find policy rates and/or other features that best meet the frequent shoppers’ insurance requirements and/or preferences. Based upon an analysis of individual frequent shopper characteristics and/or insurance preferences, each individual frequent shopper may be grouped with other insurance frequent shoppers that have the same or similar characteristics and/or insurance preferences. These “affinity groupings” (or “affinity groups”) may be based upon demographic information for the frequent shoppers (e.g., gender, birth date, etc.), information about property of the frequent shoppers (e.g., a make, model and year of an automobile, etc.), claim and/or accident history of the frequent shoppers, risk (or lack thereof) characteristics of the frequent shoppers, insurance claim expectations of the frequent shoppers, insurance company ratings, the content and/or availability of telematics data obtained from vehicles and/or mobile devices of the frequent shoppers, driving behaviors of the frequent shoppers, etc.

“The right to provide insurance coverage for the affinity groupings (either on a per-member basis or to each affinity group as a whole) may be offered for sale to various insurance providers, such as through an online auction. In some embodiments, other entities may also participate in the online auction. For example, reinsurers and/or entities that manage investment funds (e.g., hedge fund companies seeking arbitrage opportunities) may participate in the online auction, e.g., if those entities have agreements with insurance providers are licensed to write insurance and can legally service claims, etc., for the members of the affinity group.

“Once a winning bid is accepted, any existing insurance policies of the frequent shoppers affiliated with the auctioned group may (or may not) be updated to reflect new insurance policy terms or parameters (e.g., premiums, rates, etc.), discounts, refunds, etc. In some cases, new insurance policies may be provided to one or more frequent shoppers (such as when a frequent shopper is an insurance applicant, or when an existing insurance policy is canceled and a new policy is issued in its stead). The affinity groups may be updated (and/or new affinity groups may be created) over time as new or more recent frequent shopper characteristic data and/or preference information is collected and/or updated. The insurance policies associated with the updated (or new) affinity groups may then be re-auctioned (or auctioned).

“Additionally or alternatively, insurance providers may mitigate the risks associated with insurance policies that are already in effect (or will soon be in effect), by grouping/segmenting those policies and auctioning the opportunity to reinsure those policy groups to other entities (e.g., reinsurers). The grouping for these auctions may correspond to the affinity groups discussed above (e.g., with a particular group of policies that is being auctioned consisting of the policies of all members of a particular affinity group), or may be an independent/subsequent grouping of the insurance policies, for example.

“Various machine learning technologies described herein may increase the efficiency of any or all of the grouping and/or auctioning techniques discussed above, in some embodiments. For example, machine learning models may be used to evaluate risks (e.g., determine risk scores/classifications and/or infer risk-related characteristics) associated with different frequent shoppers for a particular type of insurance (e.g., risks of vehicular accidents and/or theft for auto insurance), prior to segmenting those frequent shoppers into different affinity groups based upon those risks. Machine learning may also be used to define and/or update/refine criteria for different affinity groups, e.g., by using regression models to determine which groupings of frequent shoppers have historically attracted more interest (e.g., more frequent and/or higher bids) from insurance providers, and/or have historically had more stable group membership, etc.

“Machine learning techniques may also, or instead, be used to set up an auction, and/or to facilitate the auction itself. For example, machine learning models may help determine which insurance providers to invite to participate in an auction, by predicting which providers are more likely to be interested in (e.g., more likely to submit bids for) providing insurance coverage to a particular affinity group, and/or may determine a suitable starting bid (e.g., “reserve”) amount, etc.

“Many or all facets of the auction process, and/or other procedures prior to and/or after the auction process, may be automated. For example, communications with auction participants (e.g., insurance providers and/or reinsurers, etc.), and/or communications with consumers that occur before, during, and/or after the auction process, may be automated. For example, notifying insurance providers and/or reinsurers regarding an upcoming auction, communicating bid amounts among providers and/or reinsurers during an auction, notifying auction winners, corresponding with consumers regarding insurance provider placements, billings, sending insurance cards, etc., and/or other communications may be automated. In some embodiments, records associated with consumers, insurance providers (and/or reinsurers or other auction participants), affinity groups, and/or auctions may be securely stored utilizing blockchain systems and/or techniques.

“In one aspect, a computer-implemented method comprises: (1) dividing, by one or more processors, a plurality of insurance policies for a plurality of consumers into multiple policy groups based at least upon one or more characteristics of (i) the plurality of insurance policies and/or (ii) the plurality of consumers; (2) auctioning, by the one or more processors and via a communications network, an opportunity to reinsure at least a portion of liabilities associated with one or more of the multiple policy groups; (3) receiving, by the one or more processors and via the communications network, one or more bids for purchase and/or offers of reinsurance for the one or more of the multiple policy groups; (4) accepting, by the one or more processors, a winning bid of the one or more bids; and/or (5) causing, by the one or more processors, reinsurance to be provided for insurance policies associated with a particular policy group corresponding to the winning bid, thereby providing lower cost reinsurance and/or reinsurance that is more reflective of actual risk associated with the policies in the particular policy group.

“In another aspect, a system comprises a communication interface configured to communicate with remote devices via a communications network, one or more processors, and one or more non-transitory, computer-readable media storing instructions. The instructions, when executed by the one or more processors, cause the system to: (1) divide a plurality of insurance policies for a plurality of consumers into multiple policy groups based at least upon one or more characteristics of (i) the plurality of insurance policies and/or (ii) the plurality of consumers; (2) auction, via the communication interface and the communications network, an opportunity to reinsure at least a portion of liabilities associated with one or more of the multiple policy groups; (3) receive, via the communication interface and the communications network, one or more bids for purchase and/or offers of reinsurance for the one or more of the multiple policy groups; (4) accept a winning bid of the one or more bids; and (5) cause reinsurance to be provided for insurance policies associated with a particular policy group corresponding to the winning bid, thereby providing lower cost reinsurance and/or reinsurance that is more reflective of actual risk, or lack thereof, associated with the policies in the particular policy group.”

There is additional summary information. Please visit full patent to read further.”

The claims supplied by the inventors are:

“1. A computer-implemented method comprising: dividing, by one or more processors, a plurality of insurance policies for a plurality of consumers into multiple policy groups based at least upon one or more characteristics of (i) the plurality of insurance policies and/or (ii) the plurality of consumers; auctioning, by the one or more processors and via a communications network, an opportunity to reinsure at least a portion of liabilities associated with one or more of the multiple policy groups; receiving, by the one or more processors and via the communications network, one or more bids for purchase and/or offers of reinsurance for the one or more of the multiple policy groups; accepting, by the one or more processors, a winning bid of the one or more bids; and causing, by the one or more processors, reinsurance to be provided for insurance policies associated with a particular policy group corresponding to the winning bid, thereby providing lower cost reinsurance and/or reinsurance that is more reflective of actual risk associated with the policies in the particular policy group.

“2. The computer-implemented method of claim 1, wherein the one or more characteristics include one or more of consumer age, consumer marital status, consumer education level, consumer occupation, consumer finances or income, consumer driving history, or consumer accident history.

“3. The computer-implemented method of claim 1, wherein the one or more characteristics include one or more of vehicle type, home type, geographic location, coverage type, or coverage level.

“4. The computer-implemented method of claim 1, wherein at least one characteristic of the one or more characteristics is indicative of individual driving behavior.

“5. The computer-implemented method of claim 4, further comprising: determining risk scores for the plurality of consumers based upon vehicle telematics data associated with the plurality of consumers, wherein the risk scores are included in the at least one characteristic.

“6. The computer-implemented method of claim 5, wherein auctioning the opportunity to reinsure at least the portion of the liabilities includes providing, via the communications network, the risk scores to a plurality of entities that will participate in the auction.

“7. The computer-implemented method of claim 1, wherein auctioning the opportunity to reinsure at least the portion of the liabilities includes receiving bids from one or more auction participants, at least some of the bids specifying a proposed percentage share of liability.

“8. A system comprising: a communication interface configured to communicate with remote devices via a communications network; one or more processors; and one or more non-transitory, computer-readable media storing instructions that, when executed by the one or more processors, cause the system to divide a plurality of insurance policies for a plurality of consumers into multiple policy groups based at least upon one or more characteristics of (i) the plurality of insurance policies and/or (ii) the plurality of consumers, auction, via the communication interface and the communications network, an opportunity to reinsure at least a portion of liabilities associated with one or more of the multiple policy groups, receive, via the communication interface and the communications network, one or more bids for purchase and/or offers of reinsurance for the one or more of the multiple policy groups, accept a winning bid of the one or more bids, and cause reinsurance to be provided for insurance policies associated with a particular policy group corresponding to the winning bid, thereby providing lower cost reinsurance and/or reinsurance that is more reflective of actual risk, or lack thereof, associated with the policies in the particular policy group.

“9. The system of claim 8, wherein the one or more characteristics include one or more of consumer age, consumer marital status, consumer education level, consumer occupation, consumer finances or income, consumer driving history, or consumer accident history.

“10. The system of claim 8, wherein the one or more characteristics include one or more of vehicle type, home type, geographic location, coverage type, or coverage level.

“11. The system of claim 8, wherein at least one characteristic of the one or more characteristics is indicative of individual driving behavior.

“12. The system of claim 11, wherein the instructions further cause the system to: determine risk scores for the plurality of consumers based upon vehicle telematics data associated with the plurality of consumers, wherein the risk scores are included in the at least one characteristic.

“13. The system of claim 12, wherein auctioning the opportunity to reinsure at least the portion of the liabilities includes providing, via the communications network, the risk scores to a plurality of entities.

“14. The system of claim 8, wherein auctioning the opportunity to reinsure at least the portion of the liabilities includes receiving bids from one or more auction participants, at least some of the bids specifying a proposed percentage share of liability.

“15. A non-transitory computer-readable medium storing instructions that, when executed by one or more processors, cause the one or more processors to: divide a plurality of insurance policies for a plurality of consumers into multiple policy groups based at least upon one or more characteristics of (i) the plurality of insurance policies and/or (ii) the plurality of consumers; auction, via a communications network, an opportunity to reinsure at least a portion of liabilities associated with one or more of the multiple policy groups; receive, via the communications network, one or more bids for purchase and/or offers of reinsurance for the one or more of the multiple policy groups; accept a winning bid of the one or more bids; and cause reinsurance to be provided for insurance policies associated with a particular policy group corresponding to the winning bid, thereby providing lower cost reinsurance and/or reinsurance that is more reflective of actual risk, or lack thereof, associated with the policies in the particular policy group.

“16. The non-transitory computer-readable medium of claim 15, wherein the one or more characteristics include one or more of consumer age, consumer marital status, consumer education level, consumer occupation, consumer finances or income, consumer driving history, or consumer accident history.

“17. The non-transitory computer-readable medium of claim 15, wherein the one or more characteristics include one or more of vehicle type, home type, geographic location, coverage type, or coverage level.

“18. The non-transitory computer-readable medium of claim 15, wherein at least one characteristic of the one or more characteristics is indicative of individual driving behavior.

“19. The non-transitory computer-readable medium of claim 18, wherein the instructions further cause the one or more processors to: determine risk scores for the plurality of consumers based upon vehicle telematics data associated with the plurality of consumers, wherein the risk scores are included in the at least one characteristic.

“20. The non-transitory computer-readable medium of claim 19, wherein auctioning the opportunity to reinsure at least the portion of the liabilities includes providing, via the communications network, the risk scores to a plurality of entities.”

URL and more information on this patent application, see: Frankowiak, Sara; Isaacs, Craig Dean; McCarty, Jeff; Roll, Leif Agerholm; Taylor, Kelli. Systems and Methods for Efficiently Reinsuring Insurance Policies. Filed June 24, 2020 and posted August 4, 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=%2220220245727%22.PGNR.&OS=DN/20220245727&RS=DN/20220245727

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