System and method for valuation, acquisition and management of insurance policies

• US 10,074,138 B2
• Filed: 04/02/2014
• Issued: 09/11/2018
• Est. Priority Date: 10/03/2013
• Status: Active Grant

• Current Assignee: RISK Transfer IP LLC
• Original Assignee: RISK Transfer IP LLC
• Inventors: Hughes, Paul R., Fabrizio, Dino A.
• Primary Examiner(s): Niquette, Robert R
• Assistant Examiner(s): Nguyen, Liz P
• Application Number:
  US14/243,265
• Publication Number:
  US 20150100353A1
• Time in Patent Office: 1,623 Days
• Field of Search: 705 4
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A system and method for the valuation, acquisition, and management of insurance policies whereby specific business methods, algorithms, and systems are utilized to measure specific benchmarks set by risk bearers, affiliates and clients. The benchmarks set are based on the ratios set by the risk bearer based on their specific objectives for profitability. Profitability is measured by a number of factors and ratios to include but not be limited to ROI, ROE, Combined Ratio, Expense Ratio, Loss Ratio.

Claims

1. A method of managing profitability of at least one insurance policy provided to a professional employer organization (PEO) having a plurality of PEO client companies insured thereunder through extension of the at least one insurance policy, the method comprising the steps of:

(a) storing data relating to the plurality of PEO clients to a database, wherein the PEO client data includes employee class codes and employee geographic location for employees covered by the at least one insurance policy and wherein the PEO client data is stored in the database based upon respective associated Federal Employer Identification Numbers (FEINs) of the plurality of PEO clients;

(b) obtaining real-time payroll data from the PEO for the plurality of PEO clients wherein the real-time payroll data is associated with respective FEINs of the plurality of PEO clients;

(c) dynamically calculating, in real-time, earned premium data for the at least one insurance policy of each of the plurality of PEO clients;

(d) dynamically calculating, in real-time, a severity ranking based upon the calculated earned premium data for the plurality of PEO clients;

(e) dynamically calculating, in real-time, a color value from among a range of color values corresponding to a range of severity rankings based upon the calculated severity ranking;

(f) dynamically calculating, in real-time, an indicator scaling factor corresponding to a size of the at least one insurance policy for the plurality of PEO clients;

(g) dynamically displaying, in real-time, a geographic map of policy coverage areas on a display including respective dynamic indicators each having a size based upon the indicator scaling factor and a color based upon the calculated color value; and

(h) repeating, in real-time, on an on-going basis, steps (b)-(g) to dynamically update the size and color of each of the dynamic indicators in real-time based upon real-time changes in the calculated real-time earned premium data.

2. The method of claim 1 further comprising the step of dynamically calculating, in real-time, profitability for each employee covered by the at least one insurance policy of each of the plurality of PEO clients by computing the Combined Ratio using the earned premium data for the plurality of PEO clients.

3. The method of claim 2 further comprising the step of dynamically calculating, in real-time, aggregate profitability for the at least one insurance policy provided to each of the plurality of PEO clients.

4. The method of claim 2 wherein each of the dynamic indicators corresponds to the aggregate profitability of the at least one insurance policy for all employees of each of the plurality of PEO clients that are located in the same ZIP code.

5. The method of claim 2 wherein the at least one insurance policy comprises a plurality of insurance policies.

6. The method of claim 5 wherein the severity rankings correspond to profitability for the plurality of insurance policies covering employees of each of the plurality of PEO clients.

7. The method of claim 6 wherein the severity rankings correspond to the aggregate profitability for the insurance policies for all employees of each of the plurality of PEO clients covered by the policies that are located in the same ZIP code.

8. A computer system for managing profitability of at least one insurance policy provided to a professional employer organization (PEO) having a plurality of PEO client companies insured thereunder through extension of the at least one insurance policy, the system comprising:

a server for storing data relating to the plurality of PEO clients to a database, wherein the PEO client data includes employee class codes and employee geographic location for employees covered by the at least one insurance policy and wherein the PEO client data is stored in the database based upon respective associated Federal Employer Identification Numbers (FEINs) of the plurality of PEO clients;

the server (a) obtaining real-time payroll data from a server associated with a PEO for the plurality of PEO clients wherein said real-time payroll data is associated with respective FEINs of the plurality of PEO clients, (b) dynamically calculating, in real-time, earned premium data for the at least one insurance policy of each of the plurality of PEO clients, (c) calculating, in real-time, a severity ranking based upon the calculated earned premium data for the plurality of PEO clients, (d) dynamically calculating, in real-time, a color value from among a range of color values corresponding to a range of severity rankings based upon the calculated severity ranking, (e) dynamically calculating, in real-time, an indicator scaling factor corresponding to a size of the at least one insurance policy for the plurality of PEO clients, (f) dynamically displaying, in real-time, a geographic map of policy coverage areas on a display including respective dynamic indicators each having a size based upon the indicator scaling factor and a color based upon the calculated color value, and (g) repeating, in real-time, on an on-going basis, steps (a)-(f) to dynamically update the size and color of each of the dynamic indicators in real-time based upon real-time changes in the calculated real-time earned premium data.

9. The system of claim 8 wherein the server dynamically calculates, in real-time, profitability for each employee covered by the at least one insurance policy of each of the plurality of PEO clients by calculating the Combined Ratio using the earned premium data for the plurality of PEO clients.

10. The system of claim 9 wherein the server dynamically calculates, in real-time, aggregate profitability for the at least one insurance policy provided to each of the plurality of PEO clients.

11. The system of claim 9 wherein each of the dynamic indicators corresponds to the aggregate profitability for the at least one insurance policy for all employees of each of the plurality of PEO clients covered by the policy that are located in the same ZIP code.

12. The system of claim 9 wherein the at least one insurance policy comprises a plurality of insurance policies.

13. The system of claim 12 wherein the severity rankings correspond to profitability for the plurality of insurance policies covering employees of each of the plurality of PEO clients.

14. The system of claim 13 wherein the severity rankings correspond to the aggregate profitability for the insurance policies for all employees of each of the plurality of PEO clients covered by the policies located in the same ZIP code.

15. The system of claim 8 wherein the server dynamically calculates, in real-time, the severity ranking based upon a weighted severity score, a weighted frequency score and a weighted jurisdictional score relating to the at least one insurance policy.

16. The system of claim 15 wherein the server dynamically calculates, in real-time, the severity ranking based upon a composite score relating to the at least one insurance policy from the weighted severity score, weighted frequency score and weighted jurisdictional score.

17. The system of claim 16 wherein the server dynamically calculates, in real-time, a price for the at least one insurance policy where the composite score exceeds a preselected threshold.