Premium transition factor
First Claim
1. A computer implemented method for transitioning a block of insureds from a first rating algorithm A to a second rating algorithm B, said block of insureds comprising one or more insured drivers, said method comprising:
- a) receiving by said computer a length of transition period no;
b) calculating by said computer a premium for each one of said insured drivers, said premium being for a given term n during said transition period wherein said premium is greater than or equal to the premium Ptn , given by the equation;
Ptn=Pbn−
Tfn*(Pbn−
Pao)
wherein;
i. Pbn is the premium for term n of the transition period calculated by said algorithm B;
ii. Tfn is a transition factor for term n; and
iii. Pao is the premium for term 0 of said transition period calculated by said algorithm A; and
c) outputting said premium to an insurance agent offering said insurance to said insured driverwherein Tfn is chosen such that the change in said premium Ptn from the prior premium Pt(n-1) is a normal change in premium for the majority of said insured drivers and wherein said transition factor Tfn is given by the equation;
1 Assignment
0 Petitions
Accused Products
Abstract
Auto insurance customers can be transitioned from an initial rating algorithm A to a subsequent algorithm B by phasing in the transition over a period of several years. The premium charged during the transition period is equal to the premium calculated under the rating algorithm B minus a premium adjustment. The premium adjustment is given by the difference between the premium according to algorithm B minus the legacy premium from algorithm A, said difference being multiplied by a rating transition factor. The rating transition factor may be a linearly decreasing function which has a value of 1 just before the transition period and a value of zero at the end of the transition period. The transition period may be in the range of 3 to 8 years long.
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Citations
3 Claims
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1. A computer implemented method for transitioning a block of insureds from a first rating algorithm A to a second rating algorithm B, said block of insureds comprising one or more insured drivers, said method comprising:
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a) receiving by said computer a length of transition period no; b) calculating by said computer a premium for each one of said insured drivers, said premium being for a given term n during said transition period wherein said premium is greater than or equal to the premium Ptn , given by the equation;
Ptn=Pbn−
Tfn*(Pbn−
Pao)
wherein;i. Pbn is the premium for term n of the transition period calculated by said algorithm B; ii. Tfn is a transition factor for term n; and iii. Pao is the premium for term 0 of said transition period calculated by said algorithm A; and c) outputting said premium to an insurance agent offering said insurance to said insured driver wherein Tfn is chosen such that the change in said premium Ptn from the prior premium Pt(n-1) is a normal change in premium for the majority of said insured drivers and wherein said transition factor Tfn is given by the equation; - View Dependent Claims (2, 3)
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Specification