Method and apparatus for bundling insurance coverages in order to gain a pricing advantage

• US 8,219,421 B2
• Filed: 06/27/2007
• Issued: 07/10/2012
• Est. Priority Date: 09/24/2004
• Status: Active Grant

• Current Assignee: James Dennis Schwartz
• Original Assignee: James Dennis Schwartz
• Inventors: Schwartz, James Dennis, Bakos, Tom
• Primary Examiner(s): Robinson, Kito R
• Application Number:
  US11/769,459
• Publication Number:
  US 20070250353A1
• Time in Patent Office: 1,840 Days
• Field of Search: 705/4, 705/3
• US Class Current: 705/4
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method for reducing the lapse rate of a first insurance policy comprises the step of offering to sell a rider to said first insurance policy, said rider comprising benefit features, said benefit features configured such that the combination of said rider and said first insurance policy has a higher switching cost than the switching cost of said first insurance policy alone and said rider is constructively attached to said first insurance policy, whereby said step of offering to sell is at least in part performed by technological means. The first insurance policy may be a homeowner'"'"'s policy. The rider may be a pet health insurance rider.

Claims

1. A computer based electronic method for determining and issuing an insurance policy comprising:

determining, by the computer, and presenting a set of premiums and deductibles for the insurance policy by;

identifying a class of pets to be insured;

estimating a distribution of annual veterinary expenses for an average pet of a species of a class of pet to be insured based on a look-up table, the annual veterinary expenses optionally occurring within a first geographic region to pet owners in a first demographic category or during a first time period;

adding expected non-benefit related expenses to the distribution of annual veterinary expenses to be incurred by a first insurance company in order to provide the insurance policy, the adding of the expected non-benefit related expenses yielding a set of average premiums versus deductibles,

discounting a set of actual premiums by an amount governed by a preferred reduced vaccination frequency of the particular pet to be insured, the discounted set of actual premiums yielding a set of required premiums versus deductibles; and

assembling and electronically presenting, by the computer, the set of required premiums versus deductibles to a potential customer; and

issuing the insurance policy having a premium and a deductible.

2. The method of claim 1, further comprising adjusting the distribution of annual veterinary expenses, based on a percentage likelihood that more expensive treatment will be chosen, to account for an extent to which average pets were covered by major medical health insurance policies.

3. The method of claim 1, wherein the set of average premiums is claims in excess of a deductible divided by a loss ratio.

4. The method of claim 1, further comprising adjusting the set of average premiums versus deductibles to account for inflation from a point in time during the first time period to a subsequent point in time, the adjusting yielding a set of inflation corrected premiums, wherein the inflation is based on growth in average veterinary expenses for a time period.

5. The method of claim 4, further comprising adjusting the set of inflation corrected premiums based on a schedule to account for the difference between a particular pet to be insured and the average pet with respect to at least one of age of the pet to be insured, size of the pet to be insured and breed of the pet to be insured, the adjusted set of inflation corrected premiums yielding a set of actual premiums to be charged for the particular pet to be insured.

6. A system for determining and issuing an insurance policy comprising:

means for determining and presenting a set of premiums and deductibles for the insurance policy by;

means for identifying a class of pets to be insured;

means for estimating a distribution of annual veterinary expenses for an average pet of a species of a class of pet to be insured based on a look-up table, the annual veterinary expenses optionally occurring within a first geographic region to pet owners in a first demographic category or during a first time period;

means for adding expected non-benefit related expenses to the distribution of annual veterinary expenses to be incurred by a first insurance company in order to provide the insurance policy, the adding of the expected non-benefit related expenses yielding a set of average premiums versus deductibles,

means for discounting a set of actual premiums by an amount governed by a preferred reduced vaccination frequency of the particular pet to be insured, the discounted set of actual premiums yielding a set of required premiums versus deductibles; and

means for assembling and electronically presenting the set of required premiums versus deductibles to a potential customer; and

means for issuing the insurance policy having a premium and a deductible.