SYSTEMS AND METHODS FOR GRID-BASED INSURANCE RATING

• US 20120066005A1
• Filed: 09/07/2011
• Published: 03/15/2012
• Est. Priority Date: 09/10/2010
• Status: Active Grant

• Current Assignee: State Farm Mutual Automobile Insurance Company (State Farm)
• Original Assignee: State Farm Mutual Automobile Insurance Company (State Farm)
• Inventors: Stewart, Curt A., Frank, Matthew T., McCormick, Neale E., Baughman, Matthew W., Duvvuri, Ramakrishna
• Granted Patent: US 8,504,393 B2
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 30/0282 Rating or review of business operators or products
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method for rating insurance products using a programmed computer system comprising receiving a coordinate pair including a longitude and a latitude of a location; determining a target coordinate grid block bounded by latitude and longitude lines, wherein the target coordinate grid block encompasses the coordinate pair, querying a database for a target set of existing data associated with the target coordinate grid block, wherein the existing data was associated with the target coordinate grid block prior to receiving the coordinate pair, and calculating a pure premium based at least in part on analyzing the data in the target set.

Claims

1. A method for rating insurance products using a programmed computer system comprising:

receiving a coordinate pair comprising a longitude and a latitude of a location;

determining a target coordinate grid block bounded by latitude and longitude lines, wherein the target coordinate grid block encompasses the coordinate pair;

querying a database for a target set of existing data associated with the target coordinate grid block, wherein the existing data was associated with the target coordinate grid block prior to receiving the coordinate pair; and

calculating a pure premium based at least in part on analyzing the data in the target set.

2. The method of claim 1 wherein the step of querying the database further comprises:

determining a number of latitudinal truncation digits and a number of longitudinal truncation digits;

determining a longitude query value by truncating the longitude of the coordinate pair based on the number of longitudinal truncation digits;

determining a latitude query value by truncating the latitude of the coordinate pair based on the number of latitudinal truncation digits; and

transmitting the longitude query value and latitude query value to the database.

3. The method of claim 1 wherein the step of calculating the pure premium implements a rate making formula associated with a regulated geographical area wherein the sole source of variable input to the rate making formula is a set of data elements, each of which is associated with one specific coordinate grid block.

4. The method of claim 1 further comprising:

setting an index value to an initial value, the index value associated with an current ring of coordinate grid blocks, wherein the current ring of coordinate grid blocks surrounds the coordinate grid block associated with the coordinate pair;

querying the database for a current set of existing data associated with the current ring of coordinate grid blocks;

automatically determining that the quantity of existing data retrieved in the target set and the current set is below a threshold level; and

incrementing the index value in preparation for a subsequent database query.

5. The method of claim 1 further comprising determining a grid block size based at least in part on one of:

a peril type,

a quantity of experience data associated with the target coordinate grid block,

a population density associated with the coordinate pair, and

a political subdivision associated with the coordinate pair.

6. The method of claim 1 further comprising:

determining an attribute representative of a property at the location indicated by the coordinate pair;

determining a data filter associated with the representative attribute; and

applying the data filter to the target set.

7. The method of claim 1 further comprising, each occurring prior to receiving the coordinate pair:

receiving a data value that is relevant to both a first coordinate grid block and a second coordinate grid block;

storing in the database a first record including information relating to the data value and associated with the first grid block; and

storing in the database a second record including information relating to the data value and associated with the second grid block.

8. The method of claim 1 wherein the target set of existing data includes a shared data element that is associated with at least two coordinate grid blocks.

9. A method for rating insurance products using a programmed computer system comprising:

receiving a coordinate pair comprising a longitude and a latitude of a location;

determining a target coordinate grid block by truncating a decimal representation of the longitude and latitude of the location;

querying a database for a first set of existing data associated with the target coordinate grid block, wherein the existing data was associated with the target coordinate grid block prior to receiving the coordinate pair;

setting a ring counter to an initial value;

determining a current ring of coordinate grid blocks grid adjacent to and surrounding the target grid block;

querying the database for a second set of existing data associated with each coordinate grid block in the current ring of coordinate grid blocks; and

calculating a pure premium based on constant values and an analysis of the data in the first set and the second set.

10. A computer system for rating insurance products comprising:

a processor;

a memory; and

a set of computer readable instructions stored in the memory when executed by the processor configured to;

receive a coordinate pair including a longitude and a latitude of a location;

determine a coordinate grid block bounded by latitude and longitude lines, which grid block is associated with the coordinate pair;

query a database for a plurality of existing data associated with the coordinate grid block; and

calculate a pure premium based at least in part on the plurality of existing data.

11. A computer system for rating insurance products comprising:

a processor;

a memory;

an input for receiving a coordinate pair including a longitude and a latitude of a location;

a grid block determination means for determining a coordinate grid block bounded by latitude and longitude lines, which grid block is associated with the coordinate pair;

an input for receiving database query results from a database comprising a plurality of existing data associated with the coordinate grid block; and

a rating means for determining a rate based at least in part on the plurality of existing data.

12. A computer readable medium containing a set of computer readable instructions that when loaded into a computer configure that computer to:

receive demographic data, fire station data, or other data associated with a location;

receive a coordinate pair including a longitude and latitude of a location;

determine a coordinate grid block bounded by latitude and longitude lines, which grid block is associated with the coordinate pair;

query a database for a plurality of existing data associated with the coordinate grid block; and

determine a rate based at least in part on the plurality of existing data and the demographic data, fire station data, or other data associated with a location.

13. A method for rating insurance products using a programmed computer system comprising:

receiving a coordinate pair comprising a longitude and a latitude of a location;

determining a target coordinate grid block bounded by latitude and longitude lines, which grid block is associated with the coordinate pair;

querying a database for a first set of existing data associated with the target coordinate grid block, wherein the existing data was associated with the target coordinate grid block prior to receiving the coordinate pair;

querying a database for a second set of existing data associated with a regulator, which regulates insurance policies in a geographic area comprising the location; and

calculating a pure premium based on constant values and an analysis of the data in the first set and the second set.