Process to convert cost and location of a number of actual contingent events within a region into a three dimensional surface over a map that provides for every location within the region its own estimate of expected cost for future contingent events

• US 6,186,793 B1
• Filed: 11/14/1997
• Issued: 02/13/2001
• Est. Priority Date: 11/07/1995
• Status: Expired due to Fees

• Current Assignee: Randall E. Brubaker
• Original Assignee: Randall E. Brubaker
• Inventors: Brubaker, Randall E.
• Primary Examiner(s): Smith, Jeffrey A.
• Application Number:
  US08/970,964
• Time in Patent Office: 1,187 Days
• Field of Search: 434/107, 705/500, 705/4, 345/440
• US Class Current: 434/107
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 99/00 Subject matter not provided for in other groups of this subclass

Abstract

A method of establishing the insurance rate at a desired location comprising the steps of selecting a plurality of predetermined points, calculating the insurance rate at each predetermined point, and interpolating among the values of insurance rates at predetermined points adjacent to the desired location to calculate the insurance rate at the desired location.

Claims

1. A method that utilizes and transforms historic insurance data such as losses, policyholder location, coverage provided, and other factors affecting likelihood of loss into a three dimensional surface over a map that provides a uniquely estimated rate value for every location desired, comprising the steps of:

selecting a plurality of predetermined points such that every location for which rate values are desired is located at or among the predetermined points;

determining a rate value for each predetermined point by using data uniquely selected and weighted from other locations;

interpolating among the rate values at the predetermined points to determine the rate values at desired locations which are located among the predetermined points; and

specifying the rate values calculated at the predetermined points and, by formula, the rate values at desired locations among the predetermined points to create a three dimensional surface over a map that provides a uniquely estimated rate value for every location desired.

2. The method of claim 1, wherein the plurality of predetermined points are uniformly spaced from each other.

3. The method of claim 1, wherein the step of calculating the rate values at each predetermined point comprises the step of identifying relevant information affecting the likehood of loss.

4. The method of claim 3, wherein the step of calculating the rate values at each predetermined point further comprises the step of assigning relative weights to the historic insurance data.

5. The method of claim 4, further comprising the step of adjusting the rate values at each predetermined point to reflect actuarial credibility.

6. The method of claim 1, further comprising the step of adjusting the rate values at each predetermined point to reflect actuarial credibility.

7. A method that transforms historic insurance data such as losses, policyholder location, coverage provided, and other factors affecting likelihood of loss into rate values for creating a three dimensional rating surface of uniquely estimated rate values for all locations desired comprising the steps of:

selecting a plurality of predetermined points such that all locations for which rate values are desired are located at or among the predetermined points;

determining a rate value for each predetermined point by using data uniquely selected and weighted from other locations;

interpolating among the rate values at the predetermined points to determine the rate values at desired locations which are located among the predetermined points;

transforming the rate values calculated onto a contour of point sets; and

plotting the contour point sets to formulate a three dimensional rating surface of uniquely estimated rate values for all locations desired.

8. The method of claim 7, wherein the plurality of predetermined points are uniformly spaced from each other.

9. The method of claim 7, wherein the step of calculating the rate values at each predetermined point comprises the step of identifying relevant information affecting the likelihood of loss.

10. The method of claim 9, wherein the step of calculating the rate values at each predetermined point further comprises the step of assigning relative weights to the historic insurance data.

11. The method of claim 9, further comprising the step of adjusting the rate values at each predetermined point to reflect actuarial credibility.

12. The method of claim 7 further comprising the step of adjusting the rate values at each predetermined point to reflect actuarial credibility.