Patent Application
20140074519
The present invention relates to providing a prepackaged insurance product, and more particularly relates to a providing a business owners policy (BOP) with up-front pricing for micro businesses.
Insurance carriers typically underwrite BOPs based on a process as shown in
A target market for property and casualty carriers is small (“micro”) businesses with 0-1 employees, who may or may not have prior insurance. Professional and personal services (for example hairdressers), consultants, real estate agents, and the like are examples of classes of business in which many micro businesses are found.
Addressing the above problems in prior approaches, the system and process of the invention effectively invert and simplify the current process of underwriting BOP by starting with a final price, omitting application of underwriting models to provide risk profiles and a premium based on a customer's individual data, screening for eligibility, and issuing the policy.
Generally described, one embodiment of the invention provides a system for insuring a party, comprising a database containing, for an insurance product, predetermined coverages, predetermined limits, and a fixed premium amount, and containing, for one or more categories of insureds, characteristics of members of the category; a user computing device configured to provide to a carrier automated system information relating to an applicant and a request for a determination whether the applicant is a member of one or more of the categories of insureds in the database eligible for the insurance product; wherein the carrier automated system is configured to receive the information and the request from the user computing device, to compare the information provided relating to the applicant with category characteristics from the database for determining whether the applicant is a member of one or more of the categories of insureds in the database eligible for the insurance product, and to provide a response to the user computing device based on the determination of eligibility, and if the applicant is eligible, the response providing an offer to bind the applicant to the insurance product; and a network allowing the user computing device to access the carrier automated system and allowing the carrier automated system to access the database.
The characteristics of members of a category in the database may, in one embodiment, not include a risk level to be met by an applicant individually. The coverages may include liability coverage.
The carrier automated system may be further configured in an embodiment of the invention to communicate over the network with one or more third party information sources to seek verification of information provided relating to the applicant. The carrier automated system may seek the verification of information at a time selected from prior to providing an offer to bind the applicant to insurance or subsequent to providing an offer to bind the applicant to insurance.
In an embodiment of the invention, the network comprises the Internet, and the carrier automated system comprises a carrier server operating a website.
In an embodiment of the invention, the user computing device may be associated with an agent representing the applicant. Alternatively, the user computing device may be associated with the applicant.
In an embodiment of the invention, the coverages comprise business owners insurance, and the characteristics of a member category include (separately or in combination): business classification, sales volume, number of employees, payroll amount, credit score, or premises size.
According to another embodiment, the invention provides a method for insuring a party, comprising providing a database containing, for an insurance product, predetermined coverages, predetermined limits, and a fixed premium amount, and containing, for one or more categories of insureds, characteristics of members of the category; sending from a user computing device to a carrier automated system over a network information relating to an applicant and a request for a determination whether the applicant is a member of one or more of the categories of insureds in the database eligible for the insurance product; receiving at the carrier automated system the information and the request from the user computing device; comparing at the carrier automated system the information provided relating to the applicant with category characteristics from the database to determine whether the applicant is a member of one or more of the categories of insureds in the database eligible for the insurance product; and providing a response from the carrier automated system to the user computing device based on the determination of eligibility, and if the applicant is eligible, the response including an offer to bind the applicant to the insurance product.
According to another embodiment, the invention provides a storage device having stored thereon instructions executable by a computer for providing a fixed price for predetermined coverages and coverage limits associated with a category of insureds; screening information received relating to a customer to determine whether the customer has predetermined characteristics making the customer eligible for the policy, the predetermined characteristics not including a risk level; and issuing insurance for the predetermined coverages and coverage limits at the fixed price if the customer is eligible.
According to another embodiment, the invention provides a system for insuring a party, comprising: a database containing, for an insurance product, predetermined coverages, predetermined limits, and a fixed premium amount, and containing, for one or more categories of insureds, characteristics of members of the category; a carrier automated system having access to the database and being configured to receive information relating to an applicant and a request for a determination whether the applicant is a member of one or more of the categories of insureds in the database eligible for the insurance product, to compare the information provided relating to the applicant with category characteristics from the database for determining whether the applicant is a member of one or more of the categories of insureds in the database eligible for the insurance product, and if the applicant is eligible, providing an offer to bind the applicant to the insurance product.
According to another embodiment, the invention provides a system for providing a business owner's insurance policy, comprising: a database containing acceptable profile values for characteristics of micro business insurance customers, a fixed price, and predetermined coverages and coverage limits for a business owner's insurance policy; and one or more computer systems having access to the database and being configured to execute computer software: to calculate acceptable profile values for characteristics of micro business insurance customers based on data for existing customers in similar micro businesses, and set the fixed price and predetermined coverages and coverage limits for the business owner's insurance policy based on the data, at least two of the characteristics selected from the group consisting of micro business classification, payroll amount, credit score, premises size, sales volume, and number of employees; to store the acceptable profile values, fixed price and predetermined coverages and coverage limits for the business owner's insurance policy in the database; to receive application information for a micro business party describing aspects of the micro business party's business related to the selected characteristics; to compare the application information received for the micro business party to the acceptable profile values; and in response to the application information for the micro business party having acceptable values for the characteristics, to offer the micro business party the business owner's insurance policy having the predetermined coverages and coverage limits at the fixed price without further risk analysis of the micro business party.
According to another embodiment, the invention provides a method for providing a business owner's insurance policy, comprising: calculating acceptable profile values for characteristics of micro business insurance customers based on data for existing customers in similar micro businesses, and setting a fixed price and predetermined coverages and coverage limits for a business owner's insurance policy based on the data, at least two of the characteristics selected from the group consisting of micro business classification, payroll amount, credit score, premises size, sales volume, and number of employees; receiving application information for a micro business party describing aspects of the micro business party's business related to the selected characteristics; comparing the application information received for the micro business party to the acceptable profile values; and in response to the application information for the micro business party having acceptable values for the characteristics, offering the micro business party the business owner's insurance policy having the predetermined coverages and coverage limits at the fixed price without further risk analysis of the micro business party.
According to another embodiment, the invention provides a method for providing a business owner's insurance policy, comprising: calculating acceptable profile values for characteristics of micro business insurance customers based on data for existing customers in similar micro businesses, and setting a fixed price and predetermined coverages and coverage limits for a business owner's insurance policy based on the data, at least two of the characteristics selected from the group consisting of micro business classification, payroll amount, credit score, premises size, sales volume, and number of employees; receiving application information for a micro business party describing aspects of the micro business party's business related to the selected characteristics; comparing the application information received for the micro business party to the acceptable profile values; in response to the micro business party having acceptable values for the characteristics, verifying the truth of the application information; and in response to successful verification of the application information, offering the micro business party the business owner's insurance policy having the predetermined coverages and coverage limits at the fixed price without further risk analysis of the micro business party.
From the customer's point of view, the invention eliminates unknown factors (for example by providing an up front price rather than making the customer walk through an application process to reach the price), provides a well-defined product that is easy to understand, and provides a more efficient process.
The present invention now will be described more fully hereinafter with reference to the accompanying drawings, in which some, but not all embodiments of the inventions are shown. Indeed, these inventions may be embodied in many different forms and should not be construed as limited to the embodiments set forth herein; rather, these embodiments are provided so that this disclosure will satisfy applicable legal requirements. Like numbers refer to like elements throughout.
The present invention departs from current underwriting practice by providing a prepackaged insurance product based on class or category of customer, with pre-set coverages and pre-set policy limits, based on qualifying the customer and issuing a policy. It applies readily to a BOP product based on class or category of business, such as micro businesses as described above; but the concept can be expanded to include larger businesses or other customers.
Aspects of the present invention may be implemented in a system as shown in
The system may further include a database 140 accessible by a component of the carrier automated system such as the insurance provider server 150 for the purpose of obtaining information needed to determine eligibility of a customer to obtain a prepackaged BOP or other policy as described below.
Referring again to steps 42 through 45, when using an agency marketing channel, the agent is able to tell the customer the fixed price up front, obtains responses to the required questions, and accesses carrier automated systems to submit the data.
Preferably, at this point in the process when eligibility is being determined, at step 46, in real time, internal carrier or outside data sources are accessed to verify the data on which eligibility was based. At step 47 if the customer fails the eligibility screening or verification, coverage is declined. At step 48, if the customer passes the eligibility screening and verification, the policy is issued. Alternatively, if verification is not done in real time during the process, it may be done subsequent to issuance, and the continuance of the policy may be made dependent on verification of the data provided.
In a direct customer version, such as the case of distribution online, the customer provides the answers to the required questions using the customer computing device 110, and receives either a refusal or issuance of the insurance product.
Customer support is provided efficiently at minimized expense via self service support via an online support web site or a call center.
Examples of criteria that may be used for eligibility screening in step 45 include, alone or in combination:
a. Business classification;
b. Sales volume;
c. Number of employees
d. Payroll amount;
e. Credit score;
f. Premises square footage.
The verification step 46 seeks to corroborate information received from the customer related to the eligibility criteria. For example, sources such as Dun & Bradstreet may provide name verification and confirm the provided class of business. In a more specific example, sources might verify that the customer has a Federal Employer Identification Number (FEIN) that is associated with a business within the customer-provided class of business. The customer may be linked to a tradename (DBA) confirmed to be located at the provided address in premises having the provided square footage. Risk of fraud may be reduced by the use of contractual provisions known in the industry.
As an example of a prepackaged BOP as the insurance product of the present invention, a real estate agent might acquire a BOP for a $500 premium with $25,000 in building and personal property coverage and $1 million in general liability coverage. In one embodiment, a BOP according to the invention omits real property coverage when necessary to enable the carrier to offer a fixed fee and maintain profitability. Business personal property coverage might be up to $50,000 (with a deductible such as $250), and business liability up to $500,000/1,000,000.
A BOP according to the invention is efficient for the agent to write and service, and provides a clearly defined market, cross selling opportunities, and opportunities to expand the agent's market. From the carrier's point of view, the customer has fewer opportunities and incentives to say no to the policy, and abandonment rates are lower. The carrier may capture an untapped market and grow with a profitable product. The risk that the prepackaged insurance product will not fit a particular member of the category may be mitigated by careful specification of limits, pre-renewal screening, a premium audit, and/or converting the policyholder to a different policy.
The present invention may be applied to provide insurance coverage to customers in need of insurance other than business owners.
This application is a continuation of U.S. patent application Ser. No. 11/867,865, filed Oct. 5, 2007 and U.S. Patent Application Ser. No. 60/828,593, filed Oct. 6, 2006, which are hereby incorporated herein in their entireties by reference.
| Number | Date | Country | |
|---|---|---|---|
| 60828593 | Oct 2006 | US |
| Number | Date | Country | |
|---|---|---|---|
| Parent | 11867865 | Oct 2007 | US |
| Child | 14080965 | US |
