Non-Discriminatory and Non-Individualized Vehicle Insurance Pricing Methodology Using Advanced Data Collection and Analytics

Abstract

The present invention is directed to a non-discriminatory and non-individualized macro data-based method for determining vehicle insurance pricing and applying such pricing to incentivize vehicle sales, lease, rentals, and/or subscriptions programs.

Claims

1. A processor implemented non-discriminatory and privacy protecting methodology for calculating vehicle insurance premiums for a class of vehicles utilizing non-individualized macro data from one or more of the following sources: a. primary data from OEM's, auto rental companies, subscription companies, leasing companies, etc; b. third party data including data from the various federal and state transportation and insurance departments; c. geographic and demographic data from the federal and state government as well as academic studies; and/or d. other primary data from insurance and vehicle sales, rental, and leasing companies, industry groups as well as other sources that may become available in the future.

2. The methodology as in claim 1 where the non-individualized macro data is aggregated, collected, analyzed and processed over secure networks and servers.

3. The methodology as in claim 1 where the output is a non-individualized insurance premium and policy for a given type of vehicle in a geographic region.

4. A methodology as in claim 1 where consumer privacy is ensured by not collecting individualized data such as race, gender, marital status, occupation, education, age, non-driving criminal record, etc.

5. A methodology as in claim 1 where a policy premium price is calculated and a method to ensure timely payment to the primary insurer is included.

6. A methodology as in claim 1 where the anti-discriminatory and privacy protection attributes are complimentary.

7. A methodology as in claim 1 where the barrier of high insurance premiums is removed for minority and disadvantaged drivers.

8. An apparatus for providing a non-discriminatory and privacy protecting vehicle insurance transaction incentive comprising: a. a processor; and b. a memory in electrical communication with the processor, the memory for storing a plurality of processing instructions for enabling the processor to: i. calculate a non-discriminatory and privacy protecting macro based insurance premium; ii. issue a macro-based insurance policy upon a consumer providing proof of residency in a given geographic region.

9. An apparatus as in claim 8 where all data transfer, analysis, processing and calculations are performed over secure networks using encrypted technology.

10. An apparatus as in claim 8 where the insurer is paid the macro based insurance premium.

11. An apparatus as in claim 8 where the cost of the insurance premium may be included in the total periodic price of the purchase, lease, subscription or rental of a vehicle.

12. An apparatus as in claim 8 where at least one of the following sources of macro data are accessed and processed over secure networks using secure processors: a. primary data from OEM's, auto rental companies, subscription companies, leasing companies, etc; b. third party data including data from the various federal and state transportation and insurance departments; c. geographic and demographic data from the federal and state government as well as academic studies; d. industry groups; and/or e. other primary data from insurance and vehicle sales, rental, and leasing companies, industry groups as well as other sources that may become available in the future.

13. A method for increasing the sales, subscriptions, rentals, or leases of vehicles by providing a non-discriminatory and privacy protecting macro based insurance premium and policy based on access, analysis, statistical and probabilistic analysis of government, industry, OEM, dealer, and insurance macro data.

14. A method as in claim 13 where no individualized data is collected, analyzed, retained, or processed.

15. A method as in claim 13 where artificial intelligence is combined with statistical and probabilistic models to calculate the macro based premium.

Description

BRIEF DESCRIPTION OF THE DRAWINGS

[0011] Further aspects of the instant invention will be more readily appreciated upon review of the detailed description of the preferred embodiments included below when taken in conjunction with the accompanying drawings, of which:

[0012] FIG. 1 is an overview of the system and process inherent in the applicant's macro method for calculating vehicle insurance prices;

DETAILED DESCRIPTION OF THE INVENTION

[0013] For ease in interpreting the innovative concepts embodied in this application, the following acronyms are presented:

[0014] ITCM—In The Car Module

[0015] MBIP—Macro Based Insurance Premium

[0016] MBIPP—Macro Based Insurance Premium Program

[0017] NIMBP—Non-Individualized Macro Based Premiums

[0018] OEM— Original Equipment Manufacturer

[0019] According to various embodiments of the present invention, a system and method for calculating insurance prices based on aggregation and analysis of macro data is disclosed. As used herein, the terms “sale,” “sell,” “selling,” “sold,” “buy,” “buying,” “rent,” “rental,” “lease,” “subscribe,” or “subscription,” refer to any of a purchase of an item, a purchase of an item with financing or a lease, rental or subscription of an item. The item may be a product produced by a manufacturer, or any product or service offered for sale or lease by a retailer. Whether the item is purchased, leased, or rented the purchaser, renter, or lessee shall be uniformly referred to herein as a “buyer” or “customer.” Similarly, the purchase, sale, lease, rental or subscription of an item may be referred to in the aggregate as a “conveyance”.

[0020] For ease in understanding the present invention, the example of a lease, rental, lease, subscription, or purchase of an automobile is explained in detail. However, the same methodology applies to virtually any type of land, maritime, or airborne vehicle. In preferred embodiments, the item that is sold is an automobile of a particular make and model. The automobile may be new or used as those terms are understood by one of ordinary skill in the art.

[0021] The overall advantages of the systems and methods of the present invention over prior programs are exemplified in FIG. 1. Primary data from some or all of the OEMs, Auto Rental Companies, subscription companies, dealers, etc., along with Third Party Data, Geographic and Demographic Data, and/or Primary Insurer Data are all fed into the proprietary In the Car premium calculation module.

[0022] The external data is deposited in the Data Store portion of the In the Car Module. The Module makes use of a variety of proprietary programs, algorithms, and input from key people such as data scientists, and analysts to derive Non-Individualized Macro Based Premiums. The data analysis will comprise artificial intelligence coupled with the latest probabilistic and statistical models and methods to result in a Macro Based Premium. While all or most of the data analysis and pricing calculations will be performed digitally, the output and some of the input will be reviewed by an experienced insurance professional to ensure that the data and the calculations make sense. A final step in the program is review of the data, calculations and premiums by management.

[0023] A payment mechanism is employed to ensure Primary Insurers receive the premiums.

[0024] A feedback mechanism ensures that Primary Data and Primary Insurer Data is updated to reflect the results of the Macro Based Insurance Premium implementation.

[0025] There are two ancillary benefits of the Macro Based Insurance Premium program inherent in the In The Car Module (ITCM). This program is anti-discriminatory in its implementation. Since Macro data is used to arrive at premiums, there is virtually no chance that insureds will be discriminated against. The premiums are the same for broad groups of drivers.

[0026] A second major benefit is that in a world where the privacy of consumers is compromised almost daily, use of Macro data protects the insured's privacy. The instant methodology does not collect the ever more intrusive types of data that the insurance industry currently collects. Items such as gender, income level, education, occupation, non-driving criminal record, marital status, etc are not collected using this Macro method. Since these types of data are not collected, they can not be compromised and the consumer's privacy is ensured. This instant method only collects information on vehicle type and claims in a given region. The consumer's individualized data is not collected and is therefore protected.

[0027] The output from the ITCM and associated process is that a consumer is issued a policy that is priced on Macro non-individualized data analyzed by the ITCM. The consumer may pay the insurer directly or the cost of the insurance may be included in the total lease, purchase, subscription or rental price that is charged by the OEM or leasing, subscription or rental company. The ITCM ensures that whichever method for payment of insurance is selected that the appropriate arrangements for payment of the insurance costs are made. The only thing the consumer has to do is provide proof of residency in the geographic region. In general, the geographic regions will be no smaller than a county or township. Often the geographic region will encompass several counties, townships, cities, and/or towns and combinations thereof.

[0028] The ITCM as exemplified in the instant invention should result in lower administrative costs for insurers since less time and effort will be expended collecting and analyzing a plethora of individualized data and then devising premium rates that will be accepted by regulators. Furthermore, regulators should readily accept the instant methodology because it serves the dual public policy imperatives of being non-discriminatory and protective of consumers' privacy. The overall impact of this methodology should be to increase sales/leases/subscriptions because heretofore disadvantaged persons who were excluded from the marketplace due to asymmetric insurance pricing now will be in the market. In addition, costs to insurers should decrease and the overall economy should prosper as more people will be able to get to work.

[0029] While the ITCM applies primarily to vehicle insurance, the same non-individualized macro data methodology may be used for other types of insurance.

[0030] The present methodology contains an audit function that will be accessible to regulators to ensure that the non-discriminatory and privacy protection aspects of the instant invention are maintained and are practiced.

[0031] Although the invention has been described in detail in the foregoing embodiments, it is to be understood that the descriptions have been provided for purposes of illustration only and that other variations both in form and detail can be made thereupon by those skilled in the art without departing from the spirit and scope of the invention, which is defined solely by the appended claims.