SYSTEM AND METHOD FOR DETERMINING A COST OF INSURANCE BASED UPON MONITORING, COLLECTING AND COMMUNICATING DATA REPRESENTATIVE OF A RISK'S PAYROLL CHARACTERISTICS

• US 20100179841A1
• Filed: 03/26/2010
• Published: 07/15/2010
• Est. Priority Date: 05/04/2005
• Status: Active Grant

• Current Assignee: WestGUARD Insurance Co. (Berkshire Hathaway Incorporated)
• Original Assignee: Guard Insurance Group
• Inventors: WITKOWSKI, Carl J., RICHARDSON, John H.
• Granted Patent: US 8,600,780 B2
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/1057 Benefits or employee welfare, e.g. insurance, holiday or retirement packages
• CPC Class Codes: G06Q 10/1091 Recording time for administrative or management purposes
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A system/method of determining a cost of workers compensation insurance for a selected period based upon monitoring, collecting and communicating data representative of a risk'"'"'s payroll characteristics during said selected period, wherein the cost is adjustable by relating the payroll characteristics to predetermined actuarial rates. The system/method: determines an initial profile and a base cost of workers compensation insurance, monitors data elements representative of payroll and business status of a risk during the selected period; identifies and analyzes data elements that have a pre-identified relationship to the risk'"'"'s insurability; consolidates the analyzed data elements for identifying a surcharge or discount to be applied to the base cost; and produces a final cost of workers compensation insurance for the selected period from the base cost.

Claims

1. A method of determining a cost of workers compensation insurance for a selected period based upon monitoring, collecting and communicating data representative of a risk'"'"'s payroll characteristics during said selected period, whereby said cost is adjustable by relating the payroll characteristics to predetermined actuarial rates, said method comprising:

determining an initial profile and a base cost of workers compensation insurance based on said profile;

monitoring a plurality of data elements representative of payroll and business status of a risk during said selected period;

identifying and analyzing data elements among said plurality of data elements that have a pre-identified relationship to said risk'"'"'s insurability;

consolidating said analyzed data elements for identifying a surcharge or discount to be applied to the base cost; and

producing a final cost of workers compensation insurance for the selected period from the base cost and the surcharges or discounts to be billed directly to the risk based on their finance plan,

wherein said risk is charged or credited to said final cost for workers compensation insurance.

2. The method as described in claim 1, wherein said analyzing comprises identifying a trigger event associated with one of the data elements having the preselected relationship and analyzing both the one data element and trigger information representative of the trigger event.

3. The method as described in claim 1, further including immediately communicating to a central data repository via an exchange of information representative of a trigger event associated with one of the data elements.

4. The method as described in claim 3, further including analyzing trigger event response information generated by said exchange of information.

5. The method as described in claim 1, further including generating derived data elements from said data elements.

6. The method as described in claim 5, wherein said consolidating comprises accumulating said calculated and derived data elements.

7. The method as described in claim 1, wherein said monitoring comprises:

calculating total payroll compensation and classifying relative portions of the payroll amongst a plurality of rating classifications; and

further identifying the type of work performed and classifying the identified work performed amongst a plurality of classifications as dictated by the state compensation rating bureaus.

8. The method as described in claim 7, wherein said consolidating comprises calculation of a rate based upon a percentage of the exposure in the payroll classifications.

9. The method as described in claim 1, wherein at least a portion of the data elements are within an awareness and control of the risk and therein the method further comprises adjustment by the risk, of some characteristics thereby causing a change in the data elements to effectuate change in the final cost.

10. The method as described in claim 9, wherein the base cost is for a predetermined period of time and wherein the adjusting by the risk is set to occur at predetermined intervals within the predetermined period.

11. The method as described in claim 10, wherein the predetermined period of time comprises monthly intervals.

12. An article of manufacture having computer readable program code executed by a computer to implement a method of determining a cost of workers compensation insurance for a selected period based upon monitoring, collecting and communicating data representative of a risk'"'"'s payroll characteristics during said selected period, whereby said cost is adjustable by relating the payroll characteristics to predetermined actuarial rates, said computer readable program code comprising:

computer readable program code determining an initial profile and a base cost of workers compensation insurance based on said profile;

computer readable program code monitoring a plurality of data elements representative of payroll and business status of a risk during said selected period;

computer readable program code identifying and analyzing data elements among said plurality of data elements that have a pre-identified relationship to said risk'"'"'s insurability;

computer readable program code consolidating said analyzed data elements for identifying a surcharge or discount to be applied to the base cost; and

computer readable program code producing a final cost of workers compensation insurance for the selected period from the base cost and the surcharges or discounts to be billed directly to the risk based on their finance plan,

wherein said risk is charged or credited to said final cost for workers compensation insurance.