System and process for dominance classification for insurance underwriting suitable for use by an automated system

• US 20040220839A1
• Filed: 04/30/2003
• Published: 11/04/2004
• Est. Priority Date: 04/30/2003
• Status: Active Grant

• Current Assignee: Pacific Life Insurance Company (Pacific Mutual Holding Company)
• Original Assignee: GE Financial Assurance Holdings Incorporated (General Electric Company)
• Inventors: Bonissone, Piero Patrone, Iyer, Naresh Sundaram
• Granted Patent: US 7,567,914 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 risk classification technique that exploits the existing risk structure of the decision problem in order to produce risk categorizations for new candidates is described. The technique makes use of a set of candidates for which risk categories have already been assigned (in the case of insurance underwriting, for example, this would pertain to the premium class assigned to an application). Using this set of labeled candidates, the technique produces two subsets for each risk category: the Pareto-best subset and the Pareto-worst subset by using Dominance. These two subsets can be seen as representing the least risky and the most risky candidates within a given risk category. If there are a sufficient number of candidates in these two subsets, then the candidates in these two subsets can be seen as samples from the two hypothetical risk surfaces in the feature space that bound the risk category from above and below respectively. A new candidate is assigned a risk category by verifying if the candidate lies within these two bounding risk surfaces.

Claims

1. A process for underwriting an insurance application based on a plurality of previous insurance application underwriting decisions, the process comprising:

receiving a request to underwrite an insurance application, where the request includes information about at least one application component;

defining a first set comprising at least one of the plurality of previous insurance application underwriting decisions;

defining a second set comprising at least one of the plurality of previous insurance application underwriting decisions; and

comparing the insurance application to the first set and the second set.

2. The process according to claim 1, further comprising assigning a classification to the insurance application based on the comparison of the insurance application to the first set and the second set.

3. The process according claim 2, where the classification comprises identifying the insurance application for review by an insurance classifier.

4. The process according to claim 1, wherein the insurance application comprises at least one feature;

and

where comparing the insurance application to the first set and the second set further comprises;

comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

5. The process according to claim 4, where:

comparing the at least one feature to a corresponding feature in the first set further comprises determining if the at least one feature in the insurance application is dominated by the corresponding feature in the first set; and

comparing the at least one risk category to a corresponding feature in the second set further comprises determining if the at least one feature in the insurance application dominates by the corresponding feature in the second set.

6. The process according to claim 1, wherein comparing the insurance application to the first set and the second set further comprises:

determining if the insurance application is dominated by the first set; and

determining if the insurance application dominates the second set.

7. A process for underwriting an insurance application based on a plurality of previous insurance application underwriting decisions, the process comprising:

gathering a plurality of previous insurance application underwriting decisions, where the plurality of decisions have resulted in the same classification;

identifying at least one of the plurality of previous insurance application underwriting decisions that is not dominated by any other of the plurality of previous insurance application underwriting decisions;

defining a first set comprising the at least one of the plurality of previous insurance application underwriting decisions that is not dominated;

identifying at least one of the plurality of previous insurance application underwriting decisions that does not dominate any of the other of the plurality of previous insurance application underwriting decisions;

defining a second set comprising the at least one of the plurality of previous insurance application underwriting decisions that does not dominate; and

comparing the insurance application to the first set and the second set.

8. The process according to claim 7, further comprising assigning a classification to the insurance application based on the comparison.

9. The process according claim 8, where the classification comprises identifying the insurance application for review by an insurance classifier.

10. The process according to claim 7, wherein the insurance application comprises at least one feature;

and

where comparing the insurance application to the first set and the second set further comprises;

comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

11. A system for underwriting an insurance application based on a plurality of previous insurance application underwriting decisions, the system comprising:

means for receiving a request to underwrite an insurance application, where the request includes information about at least one application component;

means for defining a first set comprising at least one of the plurality of previous insurance application underwriting decisions;

means for defining a second set comprising at least one of the plurality of previous insurance application underwriting decisions; and

means for comparing the insurance application to the first set and the second set.

12. The system according to claim 11, further comprising means for assigning a classification to the insurance application based on the comparison of the insurance application to the first set and the second set.

13. The system according claim 12, where the classification comprises identifying the insurance application for review by an insurance classifier.

14. The system according to claim 11, wherein the insurance application comprises at least one feature;

and

where the means for comparing the insurance application to the first set and the second set further comprises;

means for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

means for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

15. The system according to claim 14, where:

the means for comparing the at least one feature to a corresponding feature in the first set further comprises determining if the at least one feature in the insurance application is dominated by the corresponding feature in the first set; and

the means for comparing the at least one risk category to a corresponding feature in the second set further comprises determining if the at least one feature in the insurance application dominates by the corresponding feature in the second set.

16. The system according to claim 11, wherein the means for comparing the insurance application to the first set and the second set further comprises:

means for determining if the insurance application is dominated by the first set; and

means for determining if the insurance application dominates the second set.

17. A system for underwriting an insurance application based on a plurality of previous insurance application underwriting decisions, the system comprising:

means for gathering a plurality of previous insurance application underwriting decisions, where the plurality of decisions have resulted in the same classification;

means for identifying at least one of the plurality of previous insurance application underwriting decisions that is not dominated by any other of the plurality of previous insurance application underwriting decisions;

means for defining a first set comprising the at least one of the plurality of previous insurance application underwriting decisions that is not dominated;

means for identifying at least one of the plurality of previous insurance application underwriting decisions that does not dominate any of the other of the plurality of previous insurance application underwriting decisions;

means for defining a second set comprising the at least one of the plurality of previous insurance application underwriting decisions that does not dominate; and

means for comparing the insurance application to the first set and the second set.

18. The system according to claim 17, further comprising means for assigning a classification to the insurance application based on the comparison.

19. The system according claim 18, where the classification comprises identifying the insurance application for review by an insurance classifier.

20. The system according to claim 17, wherein the insurance application comprises at least one feature;

and

where the means for comparing the insurance application to the first set and the second set further comprises;

means for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

means for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

21. A computer medium containing instructions for causing a processor to underwrite an insurance application based on a plurality of previous insurance application underwriting decisions, the medium comprising:

code for code for receiving a request to underwrite an insurance application, where the request includes information about at least one application component;

code for defining a first set comprising at least one of the plurality of previous insurance application underwriting decisions;

code for defining a second set comprising at least one of the plurality of previous insurance application underwriting decisions; and

code for comparing the insurance application to the first set and the second set.

22. The medium according to claim 21, further comprising code for assigning a classification to the insurance application based on the comparison of the insurance application to the first set and the second set.

23. The medium according claim 22, where the classification comprises identifying the insurance application for review by an insurance classifier.

24. The medium according to claim 21, wherein the insurance application comprises at least one feature;

and

where the code for comparing the insurance application to the first set and the second set further comprises;

code for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

code for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

25. The medium according to claim 24, where:

the code for comparing the at least one feature to a corresponding feature in the first set further comprises code for determining if the at least one feature in the insurance application is dominated by the corresponding feature in the first set; and

the code for comparing the at least one risk category to a corresponding feature in the second set further comprises code for determining if the at least one feature in the insurance application dominates by the corresponding feature in the second set.

26. The medium according to claim 21, wherein the code for comparing the insurance application to the first set and the second set further comprises:

code for determining if the insurance application is dominated by the first set; and

code for determining if the insurance application dominates the second set.

27. A computer medium for causing a processor to underwrite an insurance application based on a plurality of previous insurance application underwriting decisions, the medium comprising:

code for gathering a plurality of previous insurance application underwriting decisions, where the plurality of decisions have resulted in the same classification;

code for identifying at least one of the plurality of previous insurance application underwriting decisions that is not dominated by any other of the plurality of previous insurance application underwriting decisions;

code for defining a first set comprising the at least one of the plurality of previous insurance application underwriting decisions that is not dominated;

code for identifying at least one of the plurality of previous insurance application underwriting decisions that does not dominate any of the other of the plurality of previous insurance application underwriting decisions;

code for defining a second set comprising the at least one of the plurality of previous insurance application underwriting decisions that does not dominate; and

code for comparing the insurance application to the first set and the second set.

28. The medium according to claim 27, further comprising code for assigning a classification to the insurance application based on the comparison.

29. The medium according claim 28, where the classification comprises identifying the insurance application for review by an insurance classifier.

30. The medium according to claim 27, wherein the insurance application comprises at least one feature;

and

where the code for comparing the insurance application to the first set and the second set further comprises;

code for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

code for comparing the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

31. A system for underwriting an insurance application based on a plurality of previous insurance application underwriting decisions, the system comprising:

a receiver for receiving a request to underwrite an insurance application, where the request includes information about at least one application component;

a definition module for;

defining a first set comprising at least one of the plurality of previous insurance application underwriting decisions; and

defining a second set comprising at least one of the plurality of previous insurance application underwriting decisions; and

a comparison module for comparing the insurance application to the first set and the second set.

32. The system according to claim 31, further comprising an assignment module for assigning a classification to the insurance application based on the comparison of the insurance application to the first set and the second set.

33. The system according claim 32, where the classification comprises identifying the insurance application for review by an insurance classifier.

34. The system according to claim 31, wherein the insurance application comprises at least one feature;

and

where the comparison module for comparing the insurance application to the first set and the second set further;

compare the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

compares the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.

35. The system according to claim 34, where the comparison module further:

determines if the at least one feature in the insurance application is dominated by the corresponding feature in the first set; and

determines if the at least one feature in the insurance application dominates by the corresponding feature in the second set.

36. The system according to claim 31, wherein the comparison module further:

determines if the insurance application is dominated by the first set; and

determines if the insurance application dominates the second set.

37. A system for underwriting an insurance application based on a plurality of previous insurance application underwriting decisions, the system comprising:

a gathering module for gathering a plurality of previous insurance application underwriting decisions, where the plurality of decisions have resulted in the same classification;

an identification module for identifying;

at least one of the plurality of previous insurance application underwriting decisions that is not dominated by any other of the plurality of previous insurance application underwriting decisions; and

at least one of the plurality of previous insurance application underwriting decisions that does not dominate any of the other of the plurality of previous insurance application underwriting decisions;

a definition module for defining;

a first set comprising the at least one of the plurality of previous insurance application underwriting decisions that is not dominated; and

a second set comprising the at least one of the plurality of previous insurance application underwriting decisions that does not dominate; and

a comparison module for comparing the insurance application to the first set and the second set.

38. The system according to claim 37, further comprising means for assigning a classification to the insurance application based on the comparison.

39. The system according claim 38, where the classification comprises identifying the insurance application for review by an insurance classifier.

40. The system according to claim 37, wherein the insurance application comprises at least one feature;

and

where the comparison module further;

compares the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the first set; and

compares the at least one feature to a corresponding feature in the at least one of the plurality of previous insurance application underwriting decisions in the second set.