Process for optimization of insurance underwriting suitable for use by an automated system

• US 20030187701A1
• Filed: 06/18/2002
• Published: 10/02/2003
• Est. Priority Date: 12/31/2001
• Status: Active Grant

• Current Assignee: Pacific Life Insurance Company (Pacific Mutual Holding Company)
• Original Assignee: Genworth Financial Incorporated
• Inventors: Aggour, Kareem Sherif, Bonissone, Piero Patrone, Yang, Dan, Subbu, Rajesh Venkat, Patterson, Angela Neff, Pavese, Marc, Messmer, Richard Paul
• Granted Patent: US 7,899,688 B2
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/10 Office automation; Time management
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A robust process for automating the tuning and maintenance of decision-making systems is described. A configurable multi-stage mutation-based evolutionary algorithm optimally tunes the decision thresholds and internal parameters of fuzzy rule-based and case-based systems that decide the risk categories of insurance applications. The tunable parameters have a critical impact on the coverage and accuracy of decision-making, and a reliable method to optimally tune these parameters is critical to the quality of decision-making and maintainability of these systems.

Claims

1. A process for optimizing an insurance application underwriting decision for an insurance underwriting system, the process comprising:

defining a process for performing the insurance application underwriting decision for the insurance underwriting system;

performing a plurality of insurance application underwriting decisions by applying the process to a plurality of certified insurance applications, where each of the plurality of certified insurance applications comprises an insurance application for which a correct underwriting decision has already been made; and

comparing the correct underwriting decisions to the underwriting decisions performed by applying the process.

2. The process according to claim 1, where the process is a plurality of predetermined underwriting rules.

3. The process according to claim 1, where the process is an application comparison of an insurance application with at least one previously made insurance application underwriting decision.

4. The process according to claim 1, further comprising the step of redefining the plurality of underwriting rules based on the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules.

5. The process according to claim 4, further comprising the steps of:

performing a plurality of insurance application underwriting decision by applying the plurality of redefined rules to the plurality of certified insurance applications; and

comparing the correct underwriting decision and the underwriting decisions performed by applying the plurality of redefined rules.

6. The process according to claim 1, where the step of comparing further comprises generating a mismatch matrix.

7. The process according to claim 1, further comprising the step of generating at least one penalty based on the comparison of the comparison of the underwriting decisions performed by applying the process and the correct underwriting decision.

8. The process according to claim 7, where the process is a plurality of predetermined underwriting rules, and

further comprising the step of redefining the plurality of underwriting rules based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules.

9. The process according to claim 8, further comprising the steps of:

performing a plurality of insurance application underwriting decisions by applying the plurality of redefined rules to the plurality of certified insurance applications; and

comparing the correct underwriting decisions and the underwriting decisions performed by applying the plurality of redefined rules.

10. The process according to claim 7, where the process is an application comparison of an insurance application with at least one previously made insurance application underwriting decision, and

further comprising the step of redefining the plurality of underwriting rules based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the application comparison.

11. The process according to claim 10, further comprising the steps of:

performing a plurality of insurance application underwriting decisions by applying the redefined application comparison to the plurality of certified insurance applications; and

comparing the correct underwriting decisions and the underwriting decisions performed by applying the redefined application comparison.

12. The process according to claim 7, where the step of comparing further comprises generating a mismatch matrix, and the step of generating at least one penalty further comprises the steps of:

generating a penalty matrix based on actuarial information; and

performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

13. A process for optimizing an insurance application underwriting decision based on a plurality of predetermined underwriting rules for an insurance underwriting system, the process comprising:

defining the plurality of underwriting rules for the insurance underwriting system;

performing a plurality of insurance application underwriting decisions by applying the plurality of rules to a plurality of certified insurance applications, where each of the plurality of certified insurance applications comprises an insurance application for which a correct underwriting decision has already been made;

comparing the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules;

generating at least one penalty based on the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules; and

redefining the plurality of underwriting rules based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules.

14. The process according to claim 13, further comprising the steps of:

performing a plurality of insurance application underwriting decision by applying the plurality of redefined rules to the plurality of certified insurance applications; and

comparing the correct underwriting decisions and the underwriting decisions performed by applying the plurality of redefined rules.

15. The process according to claim 13, where the step of comparing further comprises generating a mismatch matrix.

16. The process according to claim 15, where the step of generating at least one penalty further comprises the steps of:

generating a penalty matrix based on actuarial information; and

performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

17. A process for optimizing an insurance application underwriting decision based on an application comparison of an insurance application with at least one previously made insurance application underwriting decision for an insurance underwriting system, the process comprising:

defining the application comparison for the insurance underwriting system;

performing a plurality of insurance application underwriting decisions by applying the application comparison to a plurality of certified insurance applications, where each of the plurality of certified insurance applications comprises an insurance application for which a correct underwriting decision has already been made;

comparing the correct underwriting decisions and the underwriting decisions performed by applying the application comparison;

generating at least one penalty based on the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the application comparison; and

redefining the application comparison based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the application comparison.

18. The process according to claim 17, further comprising the steps of:

performing a plurality of insurance application underwriting decision by applying the redefined application comparison to the plurality of certified insurance applications; and

comparing the correct underwriting decisions and the underwriting decisions performed by applying the redefined application comparison.

19. The process according to claim 17, where the step of comparing further comprises generating a mismatch matrix.

20. The process according to claim 19, where the step of generating at least one penalty further comprises the steps of:

generating a penalty matrix based on actuarial information; and

performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

21. A process for optimizing a decision based on a plurality of predetermined rules for a decision system, the process comprising:

defining the plurality of rules for the decision system;

performing a plurality of decisions by applying the plurality of rules to a plurality of certified decisions, where each of the plurality of certified decisions comprises a decision for which a correct decision has already been made;

comparing the correct decisions to the decisions performed by applying the plurality of rules;

generating at least one penalty based on the comparison of the comparison of the underwriting decisions performed by applying the plurality of rules and the correct underwriting decision; and

redefining the plurality of rules based on the generated penalty and the comparison of the correct decisions and the underwriting decisions performed by applying the plurality of rules.

22. The process according to claim 21, further comprising the steps of:

performing a plurality of decisions by applying the plurality of redefined rules to the plurality of certified decisions; and

comparing the correct decisions to the decisions performed by applying the plurality of redefined rules.

23. The process according to claim 21, where the step of comparing further comprises generating a mismatch matrix.

24. The process according to claim 23, where the step of generating at least one penalty further comprises the steps of:

generating a penalty matrix based on historical information related to the decision system; and

performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

25. A medium storing code for causing a processor to optimize an insurance application underwriting decision for an insurance underwriting system, the medium comprising:

code for defining a process for performing the insurance application underwriting decision for the insurance underwriting system;

code for performing a plurality of insurance application underwriting decisions by applying the process to a plurality of certified insurance applications, where each of the plurality of certified insurance applications comprises an insurance application for which a correct underwriting decision has already been made; and

code for comparing the correct underwriting decisions to the underwriting decisions performed by applying the process.

26. The medium according to claim 25, where the process is a plurality of predetermined underwriting rules.

27. The medium according to claim 25, where the process is an application comparison of an insurance application with at least one previously made insurance application underwriting decision.

28. The medium according to claim 26, further comprising code for redefining the plurality of underwriting rules based on the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules.

29. The medium according to claim 28, further comprising:

code for performing a plurality of insurance application underwriting decision by applying the plurality of redefined rules to the plurality of certified insurance applications; and

code for comparing the correct underwriting decision and the underwriting decisions performed by applying the plurality of redefined rules.

30. The medium according to claim 25, where the code for comparing further comprises generating a mismatch matrix.

31. The medium according to claim 25, further comprising code for generating at least one penalty based on the comparison of the comparison of the underwriting decisions performed by applying the application comparison and the correct underwriting decision.

32. The medium according to claim 31, where the process is a plurality of predetermined underwriting rules;

and

further comprising code for redefining the plurality of underwriting rules based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules.

33. The medium according to claim 32, further comprising:

code for performing a plurality of insurance application underwriting decisions by applying the plurality of redefined rules to the plurality of certified insurance applications; and

code for comparing the correct underwriting decisions and the underwriting decisions performed by applying the plurality of redefined rules.

34. The medium according to claim 31, where the process is an application comparison of an insurance application with at least one previously made insurance application underwriting decision;

and

further comprising code for redefining the application comparison based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the application comparison.

35. The medium according to claim 32, further comprising:

code for performing a plurality of insurance application underwriting decisions by applying the redefined application comparison to the plurality of certified insurance applications; and

code for comparing the correct underwriting decisions and the underwriting decisions performed by applying the redefined application comparison.

36. The medium according to claim 31, where the code for comparing further comprises generating a mismatch matrix, and the step of generating at least one penalty further comprises:

code for generating a penalty matrix based on actuarial information; and

code for performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

37. A medium storing code for causing a processor to optimize an insurance application underwriting decision based on a plurality of predetermined underwriting rules for an insurance underwriting system, the medium comprising:

code for defining the plurality of underwriting rules for the insurance underwriting system;

code for performing a plurality of insurance application underwriting decisions by applying the plurality of rules to a plurality of certified insurance applications, where each of the plurality of certified insurance applications comprises an insurance application for which a correct underwriting decision has already been made;

code for comparing the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules;

code for generating at least one penalty based on the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules; and

code for redefining the plurality of underwriting rules based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the plurality of rules.

38. The medium according to claim 37, further comprising:

code for performing a plurality of insurance application underwriting decision by applying the plurality of redefined rules to the plurality of certified insurance applications; and

code for comparing the correct underwriting decisions and the underwriting decisions performed by applying the plurality of redefined rules.

39. The medium according to claim 38, where the code for comparing further comprises generating a mismatch matrix.

40. The medium according to claim 37, where the code for generating at least one penalty further comprises:

code for generating a penalty matrix based on actuarial information; and

code for performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

41. A medium storing code for causing a processor to optimize an insurance application underwriting decision based on an application comparison of an insurance application with at least one previously made insurance application underwriting decision for an insurance underwriting system, the medium comprising:

code for defining the application comparison for the insurance underwriting system;

code for performing a plurality of insurance application underwriting decisions by applying the application comparison to a plurality of certified insurance applications, where each of the plurality of certified insurance applications comprises an insurance application for which a correct underwriting decision has already been made;

code for comparing the correct underwriting decisions and the underwriting decisions performed by applying the application comparison;

code for generating at least one penalty based on the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the application comparison; and

code for redefining the application comparison based on the generated penalty and the comparison of the correct underwriting decisions and the underwriting decisions performed by applying the application comparison.

42. The medium according to claim 41, further comprising:

code for performing a plurality of insurance application underwriting decision by applying the redefined application comparison to the plurality of certified insurance applications; and

code for comparing the correct underwriting decisions and the underwriting decisions performed by applying the redefined application comparison.

43. The medium according to claim 42, where the code for comparing further comprises generating a mismatch matrix.

44. The medium according to claim 41, where the code for generating at least one penalty further comprises:

code for generating a penalty matrix based on actuarial information; and

code for performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.

45. A medium storing code for causing a processor to optimize a decision based on a plurality of predetermined rules for a decision system, the medium comprising:

code for defining the plurality of rules for the decision system;

code for performing a plurality of decisions by applying the plurality of rules to a plurality of certified decisions, where each of the plurality of certified decisions comprises a decision for which a correct decision has already been made;

code for comparing the correct decisions to the decisions performed by applying the plurality of rules;

code for generating at least one penalty based on the comparison of the comparison of the underwriting decisions performed by applying the plurality of rules and the correct underwriting decision; and

code for redefining the plurality of rules based on the generated penalty and the comparison of the correct decisions and the underwriting decisions performed by applying the plurality of rules.

46. The medium according to claim 45, further comprising:

code for performing a plurality of decisions by applying the plurality of redefined rules to the plurality of certified decisions; and

code for comparing the correct decisions to the decisions performed by applying the plurality of redefined rules.

47. The medium according to claim 45, where the code for comparing further comprises generating a mismatch matrix.

48. The medium according to claim 47, where the code for generating at least one penalty further comprises:

code for generating a penalty matrix based on historical information related to the decision system; and

code for performing an element-by-element multiplication of the cells of the penalty matrix with the cells of the mismatch matrix to generate an aggregate penalty.