|
Insurance Abstract
A method of evaluating insurance risk of a vehicle insurance applicant
provides identifying a plurality of temporal identifiers related
to acquired driving experience for the applicant, where the temporal
identifiers include valid license duration, license elements duration,
credit duration, no-need no-prior submission, learner permit duration,
no license violation duration; and assigning a value to each of
the identified temporal identifiers. The method includes identifying
a plurality of exception identifiers related to a driving record
of the applicant, where the exception identifiers include evidence
of prior valid license, evidence of prior violations, evidence of
accident record, and evidence of prior vehicle insurance; and assigning
a value to each of the identified exception identifiers. The method
includes calculating a driver rating based upon the value assigned
to each of the temporal and exception identifiers, and classifying
the applicant into categories of inexperienced adult driver, unverifiable
driving history, or an inexperienced driver.
Insurance Claims
1. A method of evaluating insurance risk of a vehicle insurance
applicant, the method comprising: identifying a plurality of temporal
identifiers related to acquired driving experience for the applicant,
the temporal identifiers selected from the group consisting of valid
license duration, license elements duration, credit duration, no-need
no-prior submission, learner permit duration, no license violation
duration; assigning a value to each of the identified temporal identifiers;
identifying a plurality of exception identifiers related to a driving
record of the applicant, the exception identifiers selected from
the group consisting of evidence of prior valid license, evidence
of prior violations, evidence of accident record, and evidence of
prior vehicle insurance; assigning a value to each of the identified
exception identifiers; calculating a driver rating based upon the
value assigned to each of the temporal and exception identifiers;
and classifying the applicant into one of an inexperienced adult
driver category, an unverifiable driving history category, and an
inexperienced driver category based upon the driver rating.
2. The method of claim 1, wherein the step of identifying a plurality
of temporal identifiers comprises identifying a recorded driving
history for the applicant of less than three years; and the step
of classifying the applicant comprises classifying the applicant
into the inexperienced driver category.
3. The method of claim 1, wherein the step of assigning a value
to each of the identified temporal identifiers comprises assigning
one of an arbitrary value and a lookup value to each of the identified
temporal identifiers.
4. The method of claim 1, wherein the step of assigning a value
to each of the identified exception identifiers comprises assigning
one of an arbitrary value and a lookup value to each of the identified
exception identifiers.
5. The method of claim 1, wherein the step of calculating a driver
rating comprises: summing the values for the identified temporal
identifiers; summing the values for the identified exception identifiers;
and subtracting the sum of the values for the identified exception
identifiers from the sum of the values for the identified temporal
identifiers of the applicant.
6. The method of claim 1, wherein the step of calculating a driver
rating comprises calculating a probability factor related to a risk
level in underwriting an insurance policy for the applicant.
7. The method of claim 1, further comprising: using an electronic
device in accessing a client-server system to retrieve driver record
data of the applicant from the client-server system.
8. The method of claim 7, wherein the step of accessing a client-server
system comprises accessing a distributed communication system.
9. The method of claim 7, wherein the step of accessing the client-server
system comprises accessing a distributed communication system configured
to query a separate program at a host on the distributed communication
system.
10. The method of claim 1, further comprising: underwriting an
insurance policy for the applicant based on results obtained from
the step of classifying the applicant.
11. A method of evaluating an applicant for vehicle insurance,
the method comprising: collecting a social security number supplied
by the applicant; analyzing the social security number to determine
a date of issuance of the social security number; and classifying
the applicant into one of an inexperienced adult driver category,
an unverifiable driving history category, and an inexperienced driver
category based upon the social security number.
12. The method of claim 11, wherein the step of analyzing the social
security number comprises accessing one of a government database
and a lookup table database.
13. The method of claim 12, wherein the step of analyzing the social
security number comprises electronically retrieving from a client-server
system data related to one of an area number, a group number, and
a serial number of the social security number.
14. The method of claim 13, wherein the data related to one of
an area number, a group number, and a serial number of the social
security number comprises geographical region data related to a
mailing address of the applicant to which the social security number
was issued.
15. The method of claim 14, wherein the step of classifying the
applicant comprises classifying the applicant based on the geographical
region data.
16. The method of claim 13, wherein the data related to one of
an area number, a group number, and a serial number of the social
security number comprises data related to a year the social security
number was issued to the applicant.
17. A vehicle insurance underwriting system comprising: a computer
system; and a program operable by the computer system to: calculate
a driver rating based upon comparing a plurality of temporal identifiers
related to acquired driving experience for the applicant relative
to a plurality of exception identifiers related to a driving record
of the applicant, and classify the applicant into at one of an inexperienced
adult driver category, an unverifiable driving history category,
and an inexperienced driver category based upon the driver rating.
18. The system of claim 17, wherein the program calculates the
driver rating by assigning a value to each exception identifier
and each temporal identifier, summing the exception identifier values
and summing the temporal identifier values, and subtracting the
sum of the exception identifier values from the sum of the temporal
identifier values.
19. The system of claim 18, wherein the program calculates the
driver rating by offsetting an assigned temporal identifier value
with an assigned exception identifier value.
20. The system of claim 18, wherein the program calculates the
driver rating by setting to zero a value for one of the temporal
identifiers.
Insurance Description
THE FIELD OF THE INVENTION
[0001] The present invention relates to insurance underwriting,
and more particularly, to evaluating an insurance risk level for
a vehicle insurance applicant and classifying the applicant based
upon the insurance risk level.
BACKGROUND
[0002] Automobile insurance underwriting in the United States is
traditionally based on a number of factors designed to classify
applicants into an appropriate risk class. The factors used to determine
risk class are deemed to be predictive of potential claims experience
for members of each class. The risk class and tier within the class
to which an applicant is assigned during the underwriting process
will determine the premium that they are charged for automobile
insurance. In aggregate, effective risk classification and tier
assignment strive to achieve equity in the premiums charged to applicants
for automobile insurance.
[0003] Factors employed in automobile insurance underwriting include
an applicant's age, marital status, driving record, where the applicant
lives (i.e., garaging address) and other household information,
the type of automobile insured, and how the automobile will be used.
Typically, this information is elicited by questions asked during
application for automobile insurance and verified by reference to
information in various data bases.
[0004] Another driver characteristic considered in setting automobile
insurance rates is driver/operator experience. An inexperienced
operator/driver will be charged a higher premium to cover the higher
risk of claim and higher claim costs expected from such drivers.
Generally, operators with less than 3 years of driving experience
are considered to be inexperienced. However, drivers with less than
6 years of experience may be considered inexperienced operators
by some insurers in some states and not eligible to qualify for
preferred rates.
[0005] It is commonly recognized that younger drivers, for example
under age 19, are inexperienced based on the assumption that most
individuals cannot obtain a first driver's license and begin gaining
driving experience until age 16 when they are first legally eligible
to drive in most states. However, it is also true that a percentage
of adult drivers do not have driving experience of, at least, three
years when they apply for automobile insurance coverage and are,
therefore, inexperienced operators/drivers.
[0006] A report issued to the Division of Insurance in April, 2004
by Tillinghast-Towers Perrin indicates that the frequency of inexperienced
operators/drivers property damage and collision claims is four-times
higher than experienced drivers, and the frequency of personal injury
claims is six times higher than that of experienced drivers. See
Table 1 below. This experience was based on Massachusetts-specific
data and used as a basis for rate determinations in Massachusetts.
TABLE-US-00001 TABLE 1 Experienced vs. Inexperienced Operator Claims
Frequency (per 100 Vehicles) 2001-2003 Claims Frequency Drivers
PDL PIP Collision Experienced Drivers w/6+ years 6.07 2.47 8.34
driving experience Inexperienced Drivers w/4-6 13.55 6.94 20.94
years driving experience Inexperienced Drivers w/0-3 24.35 12.16
32.68 years driving experience
[0007] Also, drivers with international driver's licenses or drivers
with licenses that were issued by jurisdictions in other than the
U.S. have driving histories that are unverifiable by automobile
insurers in the U.S. It is recognized by some that, generally, such
drivers are more likely to display poor driving skills until they
gain experience in a U.S. driving environment. These drivers, generally,
display higher claim risk and claim cost until they gain such experience.
Therefore, it is desirable for an automobile insurance company to
identify and place these individuals in higher risk categories so
that automobile insurance premiums appropriate to the risk the insurance
company is exposed to can be charged and premium equity among policyholders
can be maintained.
[0008] For these and other reasons, there is a need for the present
invention.
SUMMARY
[0009] One aspect of the present invention provides a method of
evaluating insurance risk of a vehicle insurance applicant. The
method includes identifying a plurality of primary/temporal identifiers
related to acquired U.S. driving experience for the applicant, where
the primary/temporal identifiers are selected from the group including
valid license duration, license elements duration, credit duration,
prior insurance history as evidenced by a no-need no-prior submission,
learner permit duration, no license violation duration. The method
additionally includes assigning a value to each of the identified
temporal identifiers. The method additionally includes identifying
a plurality of exception identifiers related to a driving record
of the applicant, where the exception identifiers are selected from
the group including evidence of prior valid license, evidence of
prior violations, evidence of accident record, and evidence of prior
vehicle insurance. The method includes assigning a value to each
of the identified exception identifiers. The method additionally
includes calculating a driver rating based upon the value assigned
to each of the temporal and exception identifiers, and classifying
the applicant into one of an inexperienced adult driver category,
an unverifiable driving history category, and an inexperienced driver
category based upon the driver rating.
[0010] Another aspect of the present invention provides a method
of evaluating an applicant for vehicle insurance. The method includes
collecting a social security number supplied by the applicant, and
analyzing the social security number. The method additionally includes
classifying the applicant into one of an inexperienced adult driver
category, an unverifiable driving history category, and an inexperienced
driver category based upon the social security number.
[0011] Another aspect of the present invention provides a vehicle
insurance underwriting system. The system includes a computer system,
and a program operable by the computer system. In this regard, the
program is operable to calculate a driver rating based upon comparing
a plurality of temporal identifiers related to acquired driving
experience for the applicant relative to a plurality of exception
identifiers related to a driving record of the applicant, and classify
the applicant into at one of an inexperienced adult driver category,
an unverifiable driving history category, and an inexperienced driver
category based upon the driver rating.
[0012] Aspects of the present invention provide for identifying
adult inexperienced operators during underwriting for policy renewal.
[0013] Aspects of the present invention provide for an effective
method to identify, determine and/or verify with repeatable and
predictable certainty whether an adult operator/driver is an experienced
vehicle operator.
[0014] Aspects of the present invention provide for an effective
method to identify, determine and/or verify with repeatable and
predictable certainty whether an adult operator/driver has an unverifiable
driving record.
[0015] Aspects of the present invention enable an insurance provider
to apply a repeatable and predictable system that quantifies an
equitable automobile insurance rating for insurance applicants that
is useful in determining vehicle premium rate structures that are
fair for all policyholders.
BRIEF DESCRIPTION OF THE DRAWINGS
[0016] Embodiments of the invention are better understood with
reference to the following drawings. The elements of the drawings
are not necessarily to scale relative to each other. Like reference
numerals designate corresponding similar parts.
[0017] FIG. 1 illustrates a flow diagram of a method of evaluating
insurance risks of a vehicle insurance applicant according to one
embodiment of the present invention.
[0018] FIG. 2 illustrates another flow diagram of a method of evaluating
insurance risks of a vehicle insurance applicant according to one
embodiment of the present invention.
[0019] FIG. 3 illustrates a vehicle insurance underwriting system
according to one embodiment of the present invention.
[0020] FIG. 4 illustrates a flow diagram of a method of evaluating
insurance risks of a vehicle insurance applicant according to another
embodiment of the present invention.
DETAILED DESCRIPTION
[0021] In the following Detailed Description, reference is made
to the accompanying drawings, which form a part hereof, and in which
is shown by way of illustration specific embodiments in which the
invention may be practiced. In this regard, directional terminology,
such as "top," "bottom," "front,"
"back," "leading," "trailing," etc.,
is used with reference to the orientation of the Figure(s) being
described. Because components of embodiments of the present invention
can be positioned in a number of different orientations, the directional
terminology is used for purposes of illustration and is in no way
limiting. It is to be understood that other embodiments may be utilized
and structural or logical changes may be made without departing
from the scope of the present invention. The following detailed
description, therefore, is not to be taken in a limiting sense,
and the scope of the present invention is defined by the appended
claims.
[0022] FIG. 1 illustrates a flow diagram for a method of evaluating
insurance risks of a vehicle insurance applicant according to one
embodiment of the present invention. The flow diagram in one embodiment
includes an algorithm 100 that provides at 102 identifying at least
one temporal identifier related to acquired driving experience for
an insurance applicant. Algorithm 100 provides at 104 identifying
at least one exception identifier related to a driving record of
an insurance applicant. Algorithm 100 provides at 106 calculating
a driver rating based upon the selected temporal identifiers and
the selected exception identifiers for the applicant. Algorithm
100 provides at 108 classifying the applicant into one of an experienced
adult driver category, an unverifiable driving history category,
and an inexperienced driver category based upon the driver rating.
[0023] Throughout this Specification, the term temporal identifier
is employed interchangeably with the term primary identifier. In
this regard, "primary identifier" references an identifier
or set of identifiers having a direct or indirect relationship to
a span of time over the driving experience of the insurance applicant.
"Primary identifier" does not reference an identifier
having a "primary" importance; rather a primary identifier
is a temporal identifier related to a span of time over the driving
experience of the insurance applicant. Therefore, as employed throughout
the Specification the term "primary identifier" is to
be interpreted as a temporal identifier.
[0024] Temporal identifiers as identified in algorithm 100 at 102
include, for example, the time for which the insurance applicant
has been in possession of a valid current driver's license, the
time for which the insurance applicant has had elements characteristic
of an issued adult driver's license and/or characteristics of a
credit history file, the existence or non-existence of credit history
and depth, the time over which no prior insurance policy was in
effect for any reason, the time over which the insurance applicant
held a valid driver's learner permit, and the time from which the
insurance applicant has had a violation on the driving record for
driving without a license.
[0025] Algorithm 100 provides at 104 identifying at least one exception
identifier related to a driving record of the insurance applicant.
Examples of exception identifiers include the time over which the
insurance applicant at the time of insurance application has been
in possession of a current valid U.S. driver's license, the existence
of one or more traffic tickets on the insurance applicant's driving
record for moving violations of greater than a specified number
of years, the existence of one or more accident occurrences on the
insurance applicant's driving record older than a specified number
of years, the existence of prior automobile insurance coverage,
for example, older than a specified number of years.
[0026] In general, the exception identifiers are employed to clarify
and/or augment information related to the temporal identifiers.
Exception identifiers, when applied, offset or reduce the level
of risk that is implied or calculated based on one or more temporal
identifiers. In this regard, where a temporal identifier might indicate
that an applicant for vehicle insurance is at risk of being an inexperienced
adult driver or a driver with an unverifiable driving history, the
exception identifier(s) reduces that level of risk by offsetting
or mitigating the weighing of the temporal identifiers. In one embodiment,
the exception identifiers include information that weighs in favor
of finding the adult driver to be experienced, or verifies the driver
experience of greater than, for example, three years.
[0027] In one embodiment, the suitable exception identifiers are
identified and evaluated without regard to temporal identifiers.
For example, an exception identifier is used alone to classify an
insurance applicant into a pool of applicants, that by qualifying
with an exception identifier, identifies (or pools) the applicant
as a driver with experience. In this regard, a driver so classified
would not be further checked by the insurance provider for driving
experience because that applicant has been identified by the exception
identifier as experienced. In contrast, the exception identifier
can be used alone without a temporal identifier to identify those
applicants who are inexperienced (i.e., having few or no qualifying
exception identifiers), and thus "pooled" for further
checking by the insurance provider.
[0028] Temporal identifiers and exception identifiers can be selected,
verified, and quantified from information databases, including for
example, government and public information databases. In one embodiment,
information databases useful in identifying temporal identifiers
include Department of Motor Vehicle (DMV) databases, Internal Revenue
Service databases, Social Security Administration databases, and
credit bureau databases, and other similar databases, available
to insurance underwriters and agents with or without a fee.
[0029] Algorithm 100 provides at 106 calculating a driver rating
based upon temporal identifiers and exception identifiers of the
applicant. In one embodiment, the calculation of a driver rating
includes assigning a value to each identified temporal and exception
identifier(s). The value assigned to the temporal and exception
identifier(s) in one embodiment is arbitrary. In another embodiment,
the value assigned to the temporal and exception identifier(s) is
derived from data tabulated by the insurance provider, and can include
weighting for characteristics that are preferred by the insurance
provider. In one embodiment, the calculation of a driver rating
is based upon a sum of the values for the temporal identifiers less
the value assigned for any exception identifiers, thus providing
a net sum indicative of a driver rating. In one embodiment, a probability
factor is assigned to a driver rating, where the probability factor
is useful to insurance underwriters during a follow up of the applicant
by an insurance agent or agency during directed field underwriting.
Directed field underwriting provides a mechanism by which the insurance
agent/agency can confirm or modify the presumption of inexperience,
or the existence of an unverifiable driving history.
[0030] Algorithm 100 at 108 classifies the applicant into a driver
category. Aspects of the present invention provide for an effective
method to identify, determine, and/or verify with repeatable and
predictable certainty whether an adult operator/driver is an experienced
vehicle operator. In addition, aspects of algorithm 100 provide
for an effective method to identify, determine, and/or verify with
repeatable and predictable certainty whether an adult operator/driver
has an unverifiable driving record.
[0031] In this Specification, the terms "underwrite"
and "underwriting" mean accepting or assuming an insurance
risk when issuing a driver an insurance policy, or alternatively,
classifying/evaluating an insurance risk and offering a driver an
insurance policy at a specified premium, or alternatively, declining
to offer an insurance policy to the applicant.
[0032] FIG. 2 illustrates a flow diagram for a method evaluating
insurance risks of a vehicle insurance applicant according to another
embodiment of the present invention. The flow diagram in one embodiment
includes an algorithm 200 including process 202 that defines a set
of temporal identifiers relating to driving experience. Process
204 provides assigning a numerical value to each temporal identifier.
Process 206 provides identifying at least one temporal identifier
related to acquired driving experience for an insurance applicant.
Process 208 provides defining a set of exception identifiers. In
one embodiment, process 210 provides assigning a numerical value
to each exception identifier. In another embodiment, process 212
provides for offsetting a temporal identifier with, for example,
one or more of the exception identifiers. Process 214 provides identifying
at least one exception identifier related to a driving record of
an insurance applicant. Process 216 provides a summation of all
selected identifiers relevant to the insurance applicant. Process
218 provides deriving a probability factor related to driving experience
based on the appropriate sum or difference (depending on the mathematical
sign of the number being manipulated) of all selected temporal and
exception identifiers. In FIG. 2, summing identifiers accounts for
whatever mathematical sign (positive or negative) that the value
has when the probability factor is computed. Process 220 provides
calculating a driver rating based upon the probability factor. Process
222 provides classifying the applicant into one of an experienced
adult driver category, an unverifiable driving history category,
or an inexperienced driver category based upon the driver rating.
[0033] Algorithm 200 provides at process 204 assigning a numerical
value to each temporal identifier. In one embodiment, the numerical
value is assigned based upon a "year" variable. In this
regard, the "year" variable is determined based upon a
category that represents a number of years for which the temporal
identifier has existed for the insurance applicant. For example,
the numerical value can be assigned as determined with reference
to a suitable information database, for example, a DMV record database.
[0034] In one embodiment, process 210 provides for assigning a
numerical identifier to each exception identifier. The numerical
value assigned to the exception identifiers includes real numbers
of a similar type of the numerical value assigned to the temporal
identifiers. For example, in one embodiment a driver rating is calculated
based upon subtracting the numerical value of the exception identifier
from the numerical value of the temporal identifier.
[0035] In another embodiment, an exception identifier is identified
and employed to offset one or more temporal identifiers. In this
regard, an exception identifier can reduce to zero one or more temporal
identifiers, thus affecting the calculation of the driver rating.
[0036] Process 218 provides driving a probability factor related
to driving experience based upon the sum/difference of all identifiers.
In one embodiment, the probability factor is a point value that
can be used to drive underwriting follow-up to be applied by the
insurance agent or agency involved in the auto insurance sale. For
example, the probability is indicative of a risk level of the insurance
applicant that can be confirmed or denied by the insurance agent
or agency during a directed field underwriting. In this regard,
the directed field underwriting done during the follow-up process
is useful in either confirming or modifying the presumption of inexperience,
or the presumption of unverifiable driving history of the insurance
applicant.
[0037] FIG. 3 illustrates a vehicle insurance underwriting system
300 according to one embodiment of the present invention. System
300 includes a server 302, a program 304, and an electronic device
306 having access to the program 304. In general, the server 302
and the program 304 communicate via a connection 308 and form a
client-server system 310. When a user of the electronic device 306
accesses the client-server system 310 via an access connection 312,
the program 304 communicates with the server 302 via the connection
308 such that the client-server system 310 interacts with a data
retrieval system 314.
[0038] In one embodiment, the server 302 resides on a site of a
distributed communication system, and is a program that responsively
interacts with the client program 304. In one embodiment, the server
302 includes a host 316 providing access to the data retrieval system
314. In one embodiment, access to the logical data retrieval system
314 is gained via registering through the host 316 and is fee-based.
[0039] In one embodiment, the program 304 is a program that resides
at a site on the distributed communication system and is configured
to query a separate program at a separate site (for example, the
host 316) on the distributed communication system. In this regard,
the client program 304 is a requesting program configured to "talk"
to the server 302.
[0040] The electronic device 306 can be any device configured to
access the client program 304. For example, the electronic device
306 can include a computer, a personal data assistant such as a
Blackberry.TM. personal data assistant, a cellular phone having
Internet access, or any other device having access to the worldwide
web (i.e., a hypermedia interface for viewing and exchanging information
represented as WWW). To this end, in one embodiment the connection
312 is an Internet web connection operable through a browser, useful
in both calculating a driver rating based upon the identifiers,
and transmitting insurance quotes to the applicant. With this in
mind, the connection 312 can include hard wired connections, or
alternatively, wireless connections, between the electronic device
306 and the client-server system 310.
[0041] In one embodiment, the local data retrieval system 314 is
a program operable by a computer system. In this regard, program
314 can include operand manipulative fields, and can include formatted
data compiled, for example, on a DVM database.
[0042] Regarding the Primary Identifiers, in one embodiment a set
of Primary Identifiers is employed that have a direct or indirect
relationship to the number of years of driving experience for the
insurance.
[0043] In another embodiment, the set of Primary Identifiers have
a direct or indirect relationship to the likelihood that an adult
driver only has driving experience outside of the U.S., and indicates
that the driver has an unverifiable driving history.
[0044] Such sets of Primary Identifiers can be selected such that
they are easily verified from information data bases that are available
or developed by an automobile insurance writer. The Primary Identifiers
can also be selected such that they identify a potential additional
risk of an inexperienced adult operator/driver or an adult driver
with driving experience only outside of the U.S. Primary Identifiers
can be indicative of additional risk, or alert a writing agent to
the presence of additional risk to be verified through a field underwriting
process.
[0045] In one embodiment, a rating system can be used to assign
a weight or numerical point value to each Primary/Temporal Identifier
as an indication of the value or relative importance each Primary
Identifier has in establishing a probability that an adult driver
has either (1) the characteristic of being inexperienced or (2)
having only driving experience gained outside of the U.S. The rating
system can include an initial rating system which may be adjusted
over time as the method is applied and experience is gained with
respect to the accuracy of its predictive value.
[0046] The accuracy or predictive value of the above-noted rating
system can be a function of the Primary Identifiers used and/or
the addition of other Primary Identifiers. Therefore, the addition
of Primary Identifiers and improvements in the reliability of the
Primary Identifiers that are used may result in a revision of the
rating system in terms of the weights or point values assigned to
each Primary Identifier.
[0047] In addition, the above-noted rating system can take different
forms to satisfy the needs of different automobile insurance markets.
For example, the information required to assign a weight or point
value to a Primary Identifier may vary by insurance market, company
and geographic region or state. The weight or point value assigned
to a primary identifier may also vary by insurance market, company
and geographic region or state. The Primary Identifiers can vary
in scope/quantity as the data employed to establish a Primary Identifier
may not be available, or may not be available on a timely basis
in some selling environments, for example, over the Internet. In
addition, in different selling environments it may be considered
appropriate to use different sets of Primary Identifiers and, therefore,
have different rating systems.
[0048] Therefore, aspects of this invention encompass the use of
different rating systems in different selling environments and rating
systems which may be adjusted over time to accommodate improvements
in the quality or availability of information used to establish
the Primary Identifiers.
[0049] In one embodiment, a set of Exception Identifiers is also
identified. Such sets of Exception Identifiers can be selected such
that they are verified from information data bases that are readily
available, developed or which may become readily available to an
automobile insurance writer. The sets of Exception Identifiers can
provide information that contradicts or clarifies the meaning of
a Primary Identifier such that the potential additional risk due
to an insurance applicant being an inexperienced adult operator/driver
or an adult driver with driving experience only outside of the U.S.
implied by having an unverifiable driving history is reduced and/or
eliminated.
[0050] In one embodiment, the Exception Identifiers are assigned
negative weights or point values in the rating systems used. The
rating systems incorporate negative weight or numerical point value
assignments to the Exception Identifiers in a way similar to that
used for the Primary Identifiers. Adjustments, modifications, or
improvements in the negative weights and numerical point values
assigned to the Exception Identifiers in the rating systems are
made for the same reasons and in the same way as for the Primary
Identifiers, as described above.
EXAMPLE 1
[0051] Social Security Number Employed to Classify the Applicant
[0052] In one embodiment, an applicant for vehicle insurance is
evaluated based upon the applicant's social security number (SSN)
used as a primary/temporal identifier. For example, the social security
number is supplied by the applicant when requested by the insurance
provider, and the insurance provider analyzes the social security
number. The insurance provider can analyze the SSN in a variety
of ways, including using public lookup tables having SSN information
tabulated, accessing secure government databases having SSN information
tabulated, and accessing proprietary databases that provide a range
of information correlated to SSN. Based upon the analysis, the insurance
provider classifies the applicant into one of an inexperienced adult
driver category, an unverifiable driving history category, or an
inexperienced driver category based upon the social security number.
[0053] FIG. 4 illustrates a flow diagram of a method of evaluating
insurance risks of a vehicle insurance applicant according to another
embodiment of the present invention. The flow diagram in one embodiment
includes an algorithm 400 that provides at 402 collecting a social
security number from an insurance applicant. Algorithm 400 provides
at 404 analyzing fields of the SSN. Algorithm 400 provides at 406
classifying the applicant into a driver category based upon the
analysis of the SSN.
[0054] In general terms, the nine-digit SSN is composed of three
parts: The first set of three digits is the Area Number; the second
set of two digits is the Group Number; and the final set of four
digits is the Serial Number.
[0055] The Area Number is assigned by geographical region. Prior
to 1972, SSN cards were issued in local Social Security offices
around the country and the Area Number represented the State in
which the card was issued. This was not necessarily the State where
the applicant lived, since a person could apply for a SSN card in
any Social Security office. Since 1972, when the Social Security
Administration began assigning SSNs and issuing cards centrally
from Baltimore, Md., the area number assigned has been based on
the ZIP code in the mailing address provided by the applicant. The
applicant's mailing address does not have to be the same place as
their residence.
[0056] Generally, SSNs were assigned beginning in the northeast
and moving westward. So people on the east coast have the lowest
numbers and those on the west coast have the highest numbers.
[0057] Within each area, the group numbers (middle two digits)
range from 01 to 99 but are not assigned in consecutive order. For
administrative reasons, group numbers issued first consist of the
ODD numbers from 01 through 09 and then EVEN numbers from 10 through
98, within each area number allocated to a State. After all numbers
in group 98 of a particular area have been issued, the EVEN Groups
02 through 08 are used, followed by ODD Groups 11 through 99. In
one embodiment, group numbers include date of SSN issuance, and
other encoded.
[0058] Within each group, the serial numbers (last four (4) digits)
run consecutively from 0001 through 9999.
[0059] For example, an adult applicant for vehicle insurance in
Minnesota supplies a SSN to a Minnesota insurance provider. The
SSN takes the form XXX-YY-ZZZZ. The XXX provides the area number
data, the YY provides the group number data, and the ZZZZ provides
the serial number data. The insurance provider analyzes the social
security number and first interprets the area number data (for example
XXX=247) to indicate that the applicant had the SSN issued to a
South Carolina zip code address. Thus, the applicant is not an experienced
Minnesota driver, although the applicant might be an experienced
driver moving from South Carolina to Minnesota.
[0060] The insurance provider further analyzes the social security
number, for example the group number, and interprets the group number
to indicate that the applicant first had the SSN (247-YY-ZZZZ) issued
two years previously (to the South Carolina address). In this manner,
the insurance provider, by analyzing the SSN, is able to classify
the applicant as an inexperienced adult driver based solely upon
the SSN information supplied by the applicant.
[0061] Subsequent to the Social Security Amendments of 1972 (P.L.
92-603), SSNs are issued to all legally admitted aliens upon entry,
and to anyone upon receiving or applying for any benefit paid for
by Federal funds. Subsequent to 1987, the Social Security Administration
issued SSNs for newborn infants upon registration of the birth with
the state. SSNs are employed as identifying documents related to
the issuance of driver's licenses. In this regard, an adult vehicle
insurance applicant who received a SSN two years prior to the application
for insurance has a high probability of being an inexperienced operator.
[0062] In other embodiments, more than one temporal identifier
is identified and weighted, and more than one exception identifier
is identified and weighted, and based upon the temporal and exception
identifiers the insurance provider is able to classify the applicant
into an appropriate driver category.
[0063] Additional Primary/Temporal Identifiers
[0064] Primary/Temporal Identifier #1.
[0065] If the result of this calculation is less than 3, Table
2 can be employed to assign a probability that the applicant was
an inexperienced adult driver with less than 3 years of US driving
experience. Table 2 illustrates a probability associated with the
number of years a valid operator's license has been held. Using
the result of the calculation, together with the age of the driver
and the state of residence, a probability will be assigned by referring
to the appropriate column and row in the table.
[0066] In this regard, if a driver license is in existence, the
date of issuance is useful in determining whether the applicant
is an inexperienced adult driver with less than 3 years of US driving
experience. If the driver license only indicates a date of expiration,
then the term of the driver license period less the difference between
the date of expiration/the date of application for insurance provides
guidance as to whether the applicant is an inexperienced adult driver
with less than 3 years of US driving experience.
[0067] For example, if a 25 year old operator/driver were licensed
in a state which had a 4 year renewal period and the result of the
calculation was less than 3 but greater than 2, a probability of
50% might be assigned to this Primary Indicator or a point value
of, say, 8 (in, for example, a 10 point system) might be assigned.
In one embodiment, the assignment of a probability factor or point
value to a Primary Indicator is based upon an arbitrary value selected
by an insurance provider based upon experience and/or factors not
derived from the data provided by the applicant. Table 2 is illustrative
only and other suitable tables may be used. For example, a table
in which the result of the calculation of Primary Identifier #1
was 5 or less could be considered to identify drivers with less
than 5 years of US driving experience.
[0068] The date of issue and/or expiration date of an applicant's
current valid driver license is documented on the individual driver
licenses held by applicants and can be elicited by questions asked
on an application for automobile insurance. The information provided
can be collaborated and verified by the individual state department
of motor vehicle (DMV) records.
[0069] The weight or point value result for Primary Identifier
#1 in combination with the weights or point values for other Primary
and Exception Identifiers are used to determine the probability
that the applicant was an inexperienced adult operator/driver. TABLE-US-00002
TABLE 2 Inexperienced Operator Identifier (Probability %) License
Renewal Term (years) 2 1 of 51 4 5 6 states 24 of 51 States 17 of
51 States 6 of 51 States Age of Driver <1 <2 <1 <2 <3
<1 <2 <3 <1 <2 <3 16-18 100 100 100 100 100 100
100 100 100 100 100 19 50 100 100 100 100 100 100 100 100 100 100
20 50 100 100 100 100 100 100 100 100 100 100 21 33.3 50 50 100
100 100 100 100 100 100 100 22 50 50 50 100 50 100 100 100 100 100
23 33.3 50 50 50 50 50 100 50 100 100 24 50 50 50 50 50 50 50 50
50 25 33.3 33.3 50 50 50 50 50 50 50 26 50 50 50 50 50 50 50 27
33.3 33.3 50 50 50 50 50 28 50 50 50 50 50 29 33.3 33.3 33.3 50
50 30 33.3 50 31 33.3 32 33 34 35 36 37 38 39 40 41 42 43 License
Renewal Term (years) 8 10 12 3 of 51 States 1 of 51 States 1 of
51 States Age of Driver <1 <2 <3 <1 <2 <3 <1
<2 <3 16-18 100 100 100 100 100 100 100 100 100 19 100 100
100 100 100 100 100 100 100 20 100 100 100 100 100 100 100 100 100
21 100 100 100 100 100 100 100 100 100 22 100 100 100 100 100 100
100 100 100 23 100 100 100 100 100 100 100 100 100 24 100 100 100
100 100 100 100 100 100 25 100 100 100 100 100 100 100 100 100 26
100 100 100 100 100 100 100 100 100 27 50 50 50 50 100 100 100 100
100 28 50 50 50 50 50 100 100 100 100 29 50 50 50 50 50 50 100 100
100 30 50 50 50 50 50 50 50 50 50 31 50 50 50 50 50 50 50 50 50
32 50 50 50 50 50 50 50 50 50 33 33.3 50 50 50 50 50 50 50 50 34
33.3 50 50 50 50 50 50 50 35 33.3 50 50 50 50 50 50 36 50 50 50
50 50 50 37 33.3 50 50 50 50 50 38 33.3 50 50 50 50 39 33.3 50 50
50 40 50 50 50 41 33.3 50 50 42 33.3 50 43 33.3 Note: 2 States have
options where license holder can elect 4/8 or 2/4 year renewal term.
D.C. is considered a jurisdiction equivalent to a state, therefore,
there are 51 states The earliest license age is assumed to be age
16 Arizona issues driver licenses, for age 60 or less, that does
not expire until age 65 Exceptions: 1. Drivers who moved to a new
state and receive a new license, with a new valid date. 2. Licensed
drivers that were suspended and/or revoked being issued a new license,
with a new valid date.
[0070] Primary/Temporal Identifier #2: The number of years an applicant
for auto insurance has had the elements characteristic of an issued
adult driver's license and/or credit history file.
[0071] The information employed to set the weight or point value
for this Primary/Temporal Identifier derives from: credit history
records; Social Security/Tax Identification numbers; age; and/or
address of the applicant.
[0072] A person needs to be age 18 and have an address to qualify
for an adult driver license and/or establish credit history files
in the US. Certain States also require applicants for a driver license
to provide Social Security or Tax Identification Numbers. The Social
Security Act allows states to use the Social Security number to
establish the identification of an individual. A Social Security
number is also an element useful in establishing a credit history
or file. The year and state of issue of a social security number
can be derived from tables of Social Security numbers, available
via a governmental database.
[0073] Applicant's age, address and social security number are
indicators of the possible start of a driving and/or credit history
record. As described above in Example 1, an adult applicant with
garaging address but who was issued a Social Security number within
3-5 years prior to application for automobile insurance is indicative
of a driver with little or no driving experience in the U.S.
[0074] In one embodiment, the existence of a value for this Primary
Identifier will trigger a request for verification by the writing
agent.
[0075] Primary/Temporal Identifier #3: Existence/Non Existence
of credit history and depth, which is the number of years since
the first entry or account activity in a credit history report.
[0076] The Existence/Non Existence of credit and the depth of credit
history has never been used to identify an applicant as a driver
with less than a specified number of years of driving experience.
Such specified period of years may be in the range 3-5 years. Credit
(insurance score) inquiry responses such as "NO HIT" and
"NO RECORD FOUND" are helpful indicators that an applicant
may be an inexperienced adult operator/driver or a driver with unverifiable
driving history but it is not an absolute indicator. Therefore,
such an indicator can be used as part of a set of indicators to
establish a probability related to the existence and verifiability
of driving experience.
[0077] In one embodiment, a rating system assigns a weight or numerical
point value based on the depth of applicant's credit history in
years or some other reasonable term. The existence of a value for
this Primary Identifier will trigger a request for verification
by the writing agent.
[0078] Primary/Temporal Identifier #4: Having no prior auto insurance
for any reason, within a specified period of years prior to application
for insurance. This includes first time automobile owner or first
time automobile insurance purchaser and the use of NO PRIOR/NO NEED
submission, or other suitable declaration that explains the reason(s)
for having no prior auto insurance. Such specified period of years
may be in the range 3-5 years.
[0079] A common form used in applying for automobile insurance
is called a No Prior/No Need form. It is completed by automobile
insurance applicants in order to qualify for a discount or avoid
a premium penalty for not having continuous automobile insurance
in force. This is a helpful indicator that an applicant may be an
inexperienced adult operator/driver but it is not an absolute indicator
of inexperience. Acceptable reasons for not having prior insurance
include: not previously owning or needing an automobile; returning
to the U.S. from overseas military duty; returning from long-term
work overseas; moving from a jurisdiction where automobile insurance
was not compulsory; or medical reasons.
[0080] For example, this information is derived from a Current
Carrier.TM. database, a database available from CHOICE POINT, and
a Coverage Verifier.sup.SM database, a database available from ISO,
and similar databases that identify the existence of current and
previous automobile insurance coverage, whether or not the applicant
has had lapses or cancellations.
[0081] In one embodiment, a rating system will assign a weight
or numerical point value based on whether or not this Primary Identifier
was present. See, for example, Table 6 below. In one embodiment,
the existence of a value for this Primary Identifier will trigger
a request for verification by the writing agent.
[0082] Primary/Temporal Identifier #5: Applicant has held driver's
learner's permit within a specified period of years prior to application.
Such specified period of years may be in the range 3-5 years.
[0083] The fact that an adult applicant for automobile insurance
has a recent history of a learner's permit is convincing evidence
that the applicant is an inexperienced operator/driver or a driver
with limited driving experience in the U.S. This information derives
from the appropriate state department of motor vehicle (DMV) records.
In one embodiment, a rating system assigns a high weight or numerical
point value based on whether or not this Primary Identifier was
present.
[0084] Primary/Temporal Identifier #6: Applicant has a violation
on record for driving without a license within a specified period
of years prior to application. Such specified period of years may
be in the range 3-5 years.
[0085] This factor has never been used to identify an applicant
as inexperienced operator/driver or driver with unverifiable driver
history. This information is available from the appropriate state
department of motor vehicle (DMV) records. A rating system assigns
a weight or numerical point value based on whether or not this Primary
Identifier was present.
[0086] Exception Identifiers
[0087] Exception Identifier #1: At time of auto insurance application,
applicant has current US driver's license valid for more than a
specified period of years. Such specified period of years may be
in the range 3-5 years.
[0088] The date of issue and/or expiration of an applicant's current
valid driver license is documented on the individual driver licenses
held by applicants and can be elicited by questions asked on an
application for automobile insurance. The information provided can
be collaborated and verified by the individual state department
of motor vehicle (DMV) records. In one embodiment, a rating system
assigns a negative weight or numerical point value based on whether
or not this Exception Identifier was present. See, for example,
Table 9 below.
[0089] Exception Identifier #2: At time of auto insurance application,
applicant has the existence of traffic ticket(s), on the applicant's
driving record, for moving violations older than a specified period
of years. Such specified period of years may be in the range 3-5
years.
[0090] This information is derived from the Motor Vehicle Record
(MVR) from the applicant's Department of Motor Vehicles (DMV), the
Comprehensive Loss Underwriting Exchange (a report identified as
CLUE.RTM. and available from CHOICE POINT), and Automobile-Property
Loss Underwriting Service (A-PLUS.TM.) reports, a report available
from ISO, and other similar databases. A moving violation or a ticket
on record for driving without a valid driver's license, within the
same specified period of years would void any credit in the rating
system.
[0091] The existence of traffic ticket(s) on the applicant's driving
record has not been used as a tool to isolate and identify inexperienced
operators/drivers or automobile insurance applicants with an unverifiable
driving history. In one embodiment, a rating system assigns a negative
weight or numerical point value based on whether or not this Exception
Identifier was present.
[0092] Exception Identifier #3: The existence of one or more accident
occurrences, on the applicant's driving record, older than a specified
period of years, prior to the date of application for auto insurance.
Such specified period of years may be in the range from 3-5 years.
[0093] This information is derived from the Motor Vehicle Record
(MVR) from the applicant's Department of Motor Vehicles (DMV), Comprehensive
Loss Underwriting Exchange (a report identified as CLUE.RTM. and
available from CHOICE POINT), and Automobile-Property Loss Underwriting
Service (A-PLUS.TM.) reports, a report available from ISO, and other
similar databases. A moving violation or ticket on record for driving
without a valid driver's license, within the same specified period
of years would void any credit in the rating system.
[0094] The existence of accident(s) on the applicant's driving
record has not been used as a tool to isolate and identify inexperienced
operators/drivers or automobile insurance applicants with an unverifiable
driving history. In one embodiment, a rating system assigns a negative
weight or numerical point value based on whether or not this Exception
Identifier was present.
[0095] Exception Identifier #4: The existence of prior automobile
insurance coverage, older than a specified period of years, prior
to the date of application for auto insurance. Such specified period
of years may be in the range 3-5 years.
[0096] This information is derived from a Current Carrier.TM. database,
a database available from CHOICE POINT, and a Coverage Verifier.sup.SM
database, a database available from ISO, and similar data bases
which identify the existence of current and previous automobile
insurance coverage and whether or not the applicant has had lapses
or cancellations. A moving violation or ticket on record for driving
without a valid driver's license, within the same specified period
of years would void any credit in the rating system.
[0097] The existence of prior auto insurance history has not been
used to isolate and identify inexperienced operators/drivers or
automobile insurance applicants with an unverifiable driving history.
In one embodiment, a rating system assigns a negative weight or
numerical point value based on whether or not this Exception Identifier
was present.
[0098] Other Identifiers
[0099] Other Primary/Temporal Identifiers and Exception Identifiers
can be identified that can be employed to establish a probability
that an adult driver has either (1) the characteristic of being
inexperienced operator or (2) the characteristic of having only
driving experience gained outside of the U.S. In one embodiment,
verifiable data indicative of the applicant having driving experience
in Canada is employed as an exception identifier. In this regard,
driving experience in Canada correlates to U.S. driving experience
for some U.S. insurance companies, such that verifiable driving
experience in Canada offsets the temporal identifiers based on U.S.-only
data.
[0100] Identifying data for drivers that have been verified as
experienced by the present invention can be placed in an experienced
operator/driver data base. This data base can be used as a Primary
or Exception Identifier in subsequent automobile underwriting inquiries
regarding such drivers to determine their experience status. This
will result in the use of a single summary Identifier and in a simpler,
possibly lower cost, process.
[0101] In addition, other data sources exist that are useful in
identifying additional identifiers. For example, states might be
encouraged to include on the driver's licenses they issue an original
first issue date for a driver's license in that state. Or, states
might begin to include information indicating if a driver's license
was an original issue, renewal issue, or was issued to a new resident
replacing a driver's license previously issued by another state.
Such data contained in state driver's license issuing departments
could be used to create additional primary identifiers which might
be used to enhance or replace primary identifiers described above.
[0102] In addition, insurance companies, credit vendors, or other
entities may choose to create data records based on state driver's
license records which, through a merging and comparison process,
might create new summarized and correlated data records which might
form the basis for a new or enhanced primary indicator which might
be useful in the present invention.
[0103] Similarly, credit records might be merged and compared so
as to create a new and useful data base for a new or enhanced primary
indicator. A new data base useful as a source for a primary indicator
could be created by downloading and correlating historical driver's
license, credit history, or other similar data files to form a new
data file.
EXAMPLE 2
[0104] Multiple Temporal and Exception Identifiers Employed to
Classify Applicant
[0105] The following examples illustrate how the present invention
can be employed in one embodiment. This example is used to identify
inexperienced drivers who are defined as drivers with less than
three years of driving experience. However, other definitions of
inexperienced drivers can be used. For example, an inexperienced
driver might be defined as a driver with less than 5 years of driving
experience.
[0106] Define a set of Primary Identifiers that have a direct or
indirect relationship to the number of years of driving experience
that an applicant for auto insurance may have. Such Primary Identifiers
are selected such that they can be easily verified from information
data bases readily available to an automobile insurance writer.
[0107] Establish for each Identifier a numerical value where: [0108]
An appropriate numerical value is assigned based on a "year"
variable. [0109] The "year" variable is determined based
on a category which represents the number of years for which the
Primary Identifier has existed for the automobile insurance applicant.
[0110] Such numerical values are determined based on a reference
to the appropriate information data base.
[0111] Define a set of Exception Identifiers which offset or negate
information provided by the Primary Identifier data bases. Such
Exception Identifiers are either assigned a numerical value to be
subtracted from the sum of the Primary Identifier numerical values;
or the existence of an Exception Identifier is used to reduce to
zero all Primary Identifier value.
[0112] The sum of the Primary Identifier values less Exception
Identifier values, or the net sum, indicates the degree of probability
that an auto insurance applicant is inexperienced or is likely to
have only driving experience outside of the U.S. A probability factor
or numerical point value is associated with such net sum value.
[0113] The point value or the probability factor is used to drive
underwriting follow-up to be applied by the insurance agent or agency
involved in the auto insurance sale. This is called directed field
underwriting.
[0114] Such directed field underwriting follow-up will either confirm
or modify the presumption of inexperience or non-U.S. and non-Canadian
driving experience derived from the net sum.
[0115] This method may be implemented on a computer via the coding
of computer-executable instructions and may utilize computer networks
such as the Internet or an intranet in order to facilitate the transmission
and recording of data and the transmission of the results of applying
the method.
[0116] Evaluation of Primary/Temporal Identifiers
[0117] Example data: The example considers two applicants, Applicant
A and Applicant B, for insurance. Both are in Washington and both
are age 28. At time of auto insurance application, Applicant A's
current driver's license has been valid for 1 year and 11 months
and Applicant B's current driver's license has been valid for 10
months.
[0118] Primary/Temporal Identifier #1: Valid License Duration (period
of time the current driver's license has been valid prior to application
for auto insurance) can be assigned a point value by the following
evaluation: [0119] Washington is a state with a 5 year license renewal
period. [0120] For age 28, per the Inexperienced Operator Identifier
Table (Table 2), Applicant A with a current valid driver's license
for 1 year, 11 months would get a probability assignment of 50%.
[0121] Applicant B with a current valid driver's license for 10
months would get a probability assignment, per the table, of less
than 33.3%. TABLE-US-00003 TABLE 3 Probability assigned from Table
- Based on Number of Years Current Driver's License was valid Points
Applicant A Applicant B 100% 10 -- -- 50% 8 8 -- <50% 0 -- 0
[0122] Example data: At time of auto insurance application, Applicant
A had elements characteristic of those for issuance of an adult
driver license and/or establish credit history for 4 years, while
the same elements were present for Applicant B for 6 years.
[0123] Primary/Temporal Identifier #2: License Elements Duration
(# of years elements characteristic of those for issuance of an
adult driver license and/or for the establishment of a credit history
were in place prior to application for auto insurance) can be assigned
a point value per Table 4. TABLE-US-00004 TABLE 4 # of Years Elements
Exist for Adult Driver license and/or Credit History Points Applicant
A Applicant B Years .ltoreq. 0 7 -- -- 0 < Years .ltoreq. 3 6
-- -- 3 < Years .ltoreq. 5 5 5 -- 5 < Years .ltoreq. 7 4 --
4 7 < Years 0 -- --
[0124] Example data: At the time of auto insurance application,
Applicants A has 4 years of credit depth defined by first entry
or account activity in credit history report and Applicant B's insurance
score (credit) inquiry came back "NO HIT"/"NO RECORD
FOUND".
[0125] Primary/Temporal Identifier #3: Credit Duration (Existence/Non
Existence of a credit history and depth) can be assigned a point
value per Table 5: TABLE-US-00005 TABLE 5 # of Years Since First
Entry, Activity in Credit History Points Applicant A Applicant B
NO HIT/NO RECORD FOUND 7 -- 7 0 < Years .ltoreq. 3 6 -- -- 3
< Years .ltoreq. 5 5 5 -- 5 < Years .ltoreq. 7 4 -- -- 7 <
Years 0 -- --
[0126] Example data: At the time of auto insurance application,
Applicant A owned a car and has proof of prior and continuous auto
insurance, while applicant B is purchasing a car and auto insurance
for the first time and has submitted a NO PRIOR/NO NEED form with
the insurance application.
[0127] Primary/Temporal Identifier #4: No-Prior No-Need (NPNN)
Submission (having no prior auto insurance for any reason within
previous 3 years, first time auto owner or insurance purchaser)
can be assigned a point value per Table 6: TABLE-US-00006 TABLE
6 Having no prior auto insurance, First Time Auto Owner and/or Insurance
Purchaser No Prior/No Need Form Points Applicant A Applicant B YES
5 -- 5 NO 0 0 --
[0128] Example data: At the time of auto insurance application
both applicants possessed regular driver licenses and neither had
a learner's permit during the previous 3 years.
[0129] Primary/Temporal Identifier #5: Learner Permit Duration
(applicant has held driver's learner's permit within the previous
3 years period prior to application for auto insurance) can be assigned
a point value per Table 7: TABLE-US-00007 TABLE 7 Applicant has
held Driver's Learner's Permit in the prior 3 years Points Applicant
A Applicant B YES 10 -- -- NO 0 0 0
[0130] Example data: At time of auto insurance application both
applicants do not have moving violations for driving without a license.
[0131] Primary/Temporal Identifier #6: No License Violation Duration
(violation for driving without a license in previous three years)
can be assigned a point value per Table 8: TABLE-US-00008 TABLE
8 Applicant has Violation for Driving without a license in prior
3 years Points Applicant A Applicant B YES 10 -- -- NO 0 0 0
Exception Identifiers are indicated with positive point values
which are subtracted from the sum total of Primary Identifier values.
[0132] Evaluation of Exception Identifiers
[0133] Example data: At time of the auto insurance application
both applicants have driver's licenses with valid dates of less
than 3 years.
[0134] Exception Identifier #1: Evidence of Prior Valid License
In one embodiment, an applicant having a current U.S. driver's license
valid for more than three years at time of auto insurance application
can be assigned a point value per Table 9. In another embodiment,
an applicant having a Canadian driver's license valid for more than
three years at time of auto insurance application can be assigned
a point value. TABLE-US-00009 TABLE 9 Applicant has current U.S.
Driver's License valid for more than 3 years at time of application
Points Applicant A Applicant B YES 15 -- -- NO 0 0 0
[0135] Example data: At time of auto insurance application, Applicant
A's driving record for past 5 years shows a moving violation for
speeding ticket 4.5 years ago, while Applicant B's record shows
no moving violations or traffic tickets in the same period.
[0136] Exception Identifier #2: Evidence of Prior Violations (traffic
tickets for moving violations older than 3 years, other than for
driving without a license on applicant's record) can be assigned
a point value per Table 10: TABLE-US-00010 TABLE 10 Applicant has
Traffic Tickets for moving violations older than 3 years Applicant
(other than driving without a license) Points Applicant A B YES
10 10 -- NO 0 -- 0
[0137] Example data: At time of auto insurance application both
applicants have no accidents on record older than 3 years.
[0138] Exception Identifier #3: Evidence of Accident Record (existence
of accident(s) on applicant's record older than 3 years and not
accompanied by a ticket for driving without a license) can be assigned
a point value per Table 11: TABLE-US-00011 TABLE 11 Applicant has
an Accident on Record older than 3 years Points Applicant A Applicant
B YES 10 -- -- NO 0 0 0
[0139] Example data: At time of auto insurance application both
applicants have no history of prior insurance on record older than
3 years.
[0140] Exception Identifier #4: Evidence of Prior Vehicle Insurance
(existence of prior automobile insurance older than 3 years from
date of application) can be assigned a point value per Table 12:
TABLE-US-00012 TABLE 12 Applicant has history of prior auto insurance
older than 3 years Points Applicant A Applicant B YES 10 -- -- NO
0 0 0
[0141] The above set of Primary and Exception Identifiers are applied
to the following applicants as discussed above. A net sum of 10
or more implies a high probability of being an inexperienced driver
or a driver with an unverifiable driving history.
[0142] Table 13 summarizes the total point values with respect
to each of the example drivers--Applicant A and Applicant B: TABLE-US-00013
TABLE 13 Applicant A Applicant B Primary Identifiers 1. From probability
Table. Period of time current driver's 8 0 license has been valid
2. # of years elements for adult driver license and 5 4 establishment
of a credit history were in place 3. Existence of credit history
and depth 5 7 4. No prior auto insurance, First time auto owner
or 0 5 insurance purchaser, NO PRIOR/NO NEED SUBMISSION 5. Applicant
recent history shows a driver's learner's 0 0 permit 6. Violation
for driving without a license previous 3 years 0 0 TOTAL - Primary
Identifiers 18 16 Exception Identifiers 1. Applicant has a current
valid U.S. driver's license 0 0 more than three years old 2. Traffic
tickets for moving violations older than 3 years 10 0 on applicant's
record 3. Existence of accident record older than 3 years 0 0 4.
Existence of auto insurance more than 3 years old 0 0 TOTAL - Exception
Identifiers 10 0 TOTAL Rating System Value 8 16
[0143] In one embodiment, a reference table is created in which
10 points or higher indicates the applicant as being of high risk
to be inexperienced adult operator/driver or a driver with unverifiable
driving history. Therefore, less than 10 points means a driver was
unlikely to fall into that category.
[0144] Therefore, Applicant A with a net sum of 8 is determined
to be a driver with a low probability of being an inexperienced
adult driver or a driver with unverifiable driving history.
[0145] Applicant B with net sum of 16 is identified as having a
high probability of being an inexperienced adult driver or a driver
with unverifiable driving history.
[0146] Alternatively, rather than point numerical values being
assigned as described above, percentage numerical values might be
assigned such that a higher percentage is indicative of a greater
likelihood that an adult driver was inexperienced or had an unverifiable
driving record. In such a system the reference table might be a
table of percentages ranging from 0% to 100% such that, say, a numerical
percentage value of 60% might be indicative of being an inexperienced
adult driver or a driver with unverifiable driving history.
[0147] Other reference tables with other ranges of values and different
levels which indicate a high probability that a driver is an inexperienced
adult driver or a driver with unverifiable driving history can be
developed for other appropriate sets of Primary Identifiers and
Exception Identifiers.
EXAMPLE 3
[0148] A Single Temporal Identifier and a Single Exception Identifier
is Employed to Classify Applicant
Temporal Identifier Valid License Duration
[0149] Washington is a state with a 5 year license renewal period.
[0150] For age 23, per the Inexperienced Operator Identifier Table
(Table 2), Applicant A with a current valid driver's license for
2 years, 3 months would get a probability assignment of 100%.
[0151] Applicant B, age 23, with a current valid driver's license
for 10 months would get a probability assignment, per the table,
of 50%. TABLE-US-00014 TABLE 14 Probability assigned from Table
2 - Based on Number of Years Current Driver's License was valid
Points Applicant A Applicant B 100% 10 10 -- 50% 8 -- 8 <50%
0 -- 0
Example data: At time of auto insurance application, both applicants
have an issued driver license with valid dates of less than three
years.
[0152] Exception Identifier: Evidence of Prior Valid License (applicant
has a current U.S. driver's license valid for more than three years
at time of auto insurance application) is assigned a point value
per Table 9: TABLE-US-00015 TABLE 15 Applicant has current U.S.
Driver's License valid for more than 3 years at time of application
Points Applicant A Applicant B YES 15 -- -- NO 0 0 0
[0153] Example data: At time of auto insurance application, both
applicants have an issued driver license with valid dates of less
than three years.
[0154] For Applicant A, the total of the temporal identifiers is
10; for Applicant B, the total of the temporal identifiers is 8.
For Applicants A and B, the total of the exception identifiers is
0. In one embodiment, the rating system for Applicant A has a value
of 10, and the rating system for Applicant B has a value of 8.
[0155] In one embodiment, a reference table is created in which
a rating of 10 points or higher indicates the applicant as being
of high risk to be inexperienced adult operator/driver or a driver
with unverifiable driving history, and a rating of between zero
and 10 points indicates that the driver is likely an experienced
adult driver, and a negative rating likely indicates an experienced
driver.
[0156] Therefore, Applicant A with a net sum of 10 has a probability
of being an inexperienced adult driver or a driver with unverifiable
driving history. Applicant B with net sum of 8 is identified as
having a lower probability of being an inexperienced driver.
EXAMPLE 4
[0157] A Single Temporal Identifier Employed to Classify Applicant
[0158] Primary/Temporal Identifier #4: No-Prior No-Need (NPNN)
Submission (having no prior auto insurance for any reason within
previous 3 years, first time auto owner or insurance purchaser).
In one embodiment, an NPNN submission by the applicant indicates
the applicant has a high probability of being an inexperienced adult
driver or a driver with unverifiable driving history. In another
embodiment, the existence of an NPNN submission is assigned a point
value per Table 16. In the case where there is no exception identifier
to offset the information contained in the NPNN submission, the
high point value of temporal identifier #4 is indicative that the
applicant has a high probability of being an inexperienced adult
driver or a driver with unverifiable driving history. TABLE-US-00016
TABLE 16 Having no prior auto insurance, First Time Auto Owner and/or
Insurance Applicant Applicant Purchaser No Prior/No Need Form Points
A B YES 10 -- 10 NO 0 0 --
[0159] Example data: At the time of auto insurance application,
Applicant A owns a car and has proof of prior and continuous insurance,
while Applicant B is purchasing a car and auto insurance for the
first time and has submitted a No Prior/No Need form with the insurance
application.
[0160] In one embodiment, a reference table is created in which
10 points or higher indicates the applicant as being of high risk
to be inexperienced adult operator/driver or a driver with unverifiable
driving history. Therefore, less than 10 points would mean a driver
was unlikely to fall into that category.
[0161] Therefore, based upon one temporal identifier alone, Applicant
A with a net sum of 0 is determined to be a driver with a low probability
of being an inexperienced adult driver or a driver with unverifiable
driving history.
[0162] Applicant B with net sum of 10 is identified as having a
high probability of being an inexperienced adult driver or a driver
with unverifiable driving history.
[0163] Although specific embodiments have been illustrated and
described herein, it will be appreciated by those of ordinary skill
in the art that a variety of alternate and/or equivalent implementations
may be substituted for the specific embodiments shown and described
without departing from the scope of the present invention. This
application is intended to cover any adaptations or variations of
the specific embodiments discussed herein. Therefore, it is intended
that this invention be limited only by the claims and the equivalents
thereof.
|