FIELD OF INVENTION

The present invention relates to an insurance arrangement.

More particularly, the present invention relates to an insurance arrangement for underwriting, pricing and managing insurance by collecting and interpreting data from more than one source.

BACKGROUND TO INVENTION

Insurance is a means of protection from financial loss, namely a form of risk management primarily used to hedge against the risk of a contingent or uncertain loss.

An entity which provides insurance is known as an insurer, insurance company or insurance carrier. The person or entity who buys insurance is known as an insured or policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and must involve something in which the insured has an insurable interest established by ownership, possession, or pre-existing relationship.

The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. The amount of money charged by the insurer to the insured for the coverage set forth in the insurance policy is called the premium. If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster.

Insurance underwriters evaluate the risk and exposures of potential clients. They decide how much coverage the client should receive, how much they should pay for it, or whether even to accept the risk and insure them. Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk. The function of the underwriter is to protect the company's book of business from risks that they feel will make a loss and issue insurance policies at a premium that is commensurate with the exposure presented by a risk.

Each insurance company has its own set of underwriting guidelines to help the underwriter determine whether or not the company should accept the risk. The information used to evaluate the risk of an applicant for insurance will depend on the type of coverage involved. For example, in underwriting automobile coverage, an individual's driving record is critical. However, the type of automobile is actually far more critical. As part of the underwriting process for life or health insurance, medical underwriting may be used to examine the applicant's health status (other factors may be considered as well, such as age and occupation). The factors that insurers use to classify risks are generally objective, clearly related to the likely cost of providing coverage, practical to administer, consistent with applicable law, and designed to protect the long-term viability of the insurance program. The underwriters may decline the risk or may provide a quotation in which the premiums have been loaded (including the amount needed to generate a profit, in addition to covering expenses) or in which various exclusions have been stipulated, which restrict the circumstances under which a claim would be paid. Depending on the type of insurance product (line of business), insurance companies use automated underwriting systems to encode these rules, and reduce the amount of manual work in processing quotations and policy issuance. This is especially the case for certain simpler life or personal lines (auto, homeowners) insurance. Some insurance companies, however, rely on agents to underwrite for them. This arrangement allows an insurer to operate in a market closer to its clients without having to establish a physical presence.

Hence underwriting a risk in insurance involves categorizing the risk into appropriate risk pools so that premiums are actuarially priced to meet claims and expenses whilst allowing for a reasonable rate of return. Categorising a risk involves collecting relevant data to determine the expected loss and variance of a risk. This data is traditionally sought from the insured. Unfortunately most insurers rely on the collection and interpretation of data from a single source to base their pricing and risk appetite on, whilst numerous sources are available.

It is an object of this invention to suggest an insurance arrangement which will assist overcoming the aforementioned problem. SUMMARY OF INVENTION

According to the invention, an insurance arrangement, includes an algorithm and electronic processing means associated with a computing device adapted

(a) to generate, update, delete and store social, business and/or other connection details between entities in a network;

(b) to determine which entity in the network is requiring insurance;

(c) to separate underwriting questionnaires into fragments;

(d) to transmit these fragments to various entities that are connected in some way to the insuring entity for completion;

(e) to receive answers to the questionnaire fragments;

(f) to aggregate the fragments and determine the risk associated with insuring the risk; and

(g) to store results of the determinations.

The network may include social, business and/or other networks.

The arrangement may be adapted to enable the electronic processing means to send the same underwriting fragment to various entities through the world wide web which are connected to the entity requiring insurance and comparing the received answers for patterns of consistency and therefore applying the appropriate weight to the questionnaire fragment when determining the risk associated with insuring the risk. The arrangement may be adapted to determine a rate for the insuring entity based on the risk determined.

The arrangement may be adapted to receive past underwriting experience with associated past aggregated underwriting questionnaires and correlates this with the aggregated underwriting questionnaire for the insuring entity.

The arrangement may be adapted to use correlations established to influence the rate for the insuring entity.

Some or all of the underwriting questions may be based on psychometric principles to determine the personality type of the entity seeking insurance as determined by the network connections.

The arrangement may be adapted to correlate the established psychometric result of the insuring entity to past psychometric results and associated underwriting experience, thereby influencing the rate for the insuring entity.

The arrangement may be adapted to be used for underwriting, pricing and managing insurance, insurance plans and/or insurance products.

Also according to the invention, an insurance system, which includes an algorithm and electronic processing means associated with a computing device adapted

(a) to generate, update, delete and store social, business and/or other connection details between entities in a network;

(b) to determine which entity in the network is requiring insurance; (c) to separate underwriting questionnaires into fragments;

(d) to transmit these fragments to various entities that are connected in some way to the insuring entity for completion;

(e) to receive answers to the questionnaire fragments;

(f) to aggregate the fragments and determine the risk associated with insuring the risk; and

(g) to store results of the determinations.

The network may include social, business and/or other networks.

The system may be adapted to enable the electronic processing means to send the same underwriting fragment to various entities through the world wide web which are connected to the entity requiring insurance and comparing the received answers for patterns of consistency and therefore applying the appropriate weight to the questionnaire fragment when determining the risk associated with insuring the risk.

The system may be adapted to determine a rate for the insuring entity based on the risk determined.

The system may be adapted to receive past underwriting experience with associated past aggregated underwriting questionnaires and correlates this with the aggregated underwriting questionnaire for the insuring entity. The system may be adapted to use correlations established to influence the rate for the insuring entity.

Some or all of the underwriting questions may be based on psychometric principles to determine the personality type of the entity seeking insurance as determined by the network connections.

The system may be adapted to correlate the established psychometric result of the insuring entity to past psychometric results and associated underwriting experience, thereby influencing the rate for the insuring entity.

The system may be adapted to be used for underwriting, pricing and managing insurance, insurance plans and/or insurance products.

Yet further according to the invention, an insurance method, which includes the following steps performed by means of an algorithm and electronic processing means associated with a computing device:

(a) of generating, updating, deleting and storing social, business and/or other connection details between entities in a network;

(b) of determining which entity in the network is requiring insurance;

(c) of separating underwriting questionnaires into fragments;

(d) of transmitting these fragments to various entities that are connected in some way to the insuring entity for completion; (e) of receiving answers to the questionnaire fragments;

(f) of aggregating the fragments and determine the risk associated with insuring the risk; and

(g) of storing results of the determinations.

The network may include social, business and/or other networks.

The method may include the steps of sending the same underwriting fragment to various entities through the world wide web which are connected to the entity requiring insurance and of comparing the received answers for patterns of consistency and therefore applying the appropriate weight to the questionnaire fragment when determining the risk associated with insuring the risk.

The method may include the step of determining a rate for the insuring entity based on the risk determined.

The method may include the steps of receiving past underwriting experience with associated past aggregated underwriting questionnaires and of correlating this with the aggregated underwriting questionnaire for the insuring entity.

The method may include the step of using correlations established to influence the rate for the insuring entity.

The method may include the step of basing some or all of the underwriting questions on psychometric principles to determine the personality type of the entity seeking insurance as determined by the network connections. The method may include the step of correlating the established psychometric result of the insuring entity to past psychometric results and associated underwriting experience, thereby influencing the rate for the insuring entity.

The method may be adapted to be used for underwriting, pricing and managing insurance, insurance plans and/or insurance products.

BRIEF DESCRIPTION OF DRAWINGS

The invention will now be described by way of example with reference to the accompanying schematic drawings.

Figures 1 a and 1 b is a connected unit diagram illustrating an embodiment example for implementing the insurance arrangement, namely the collection of underwriting information from the insuring entity by means of the completion of an electronic application form by the insuring entity and the gathering of comparison data in the form of random underwriting fragments compiled by posing questions to connected entities identified by the insuring entity and the analysis thereof in order to determine insurance risk and calculate premiums, which analysis includes the comparison of the risk profile of the insuring entity, generated by the system, with similar risk profiles based on comparable biographical and psychometnc data to establish the insuring entity's possible future claims experience and to generate an accurate premium based on the risk that the insuring entity will possibly pose. DETAILED DESCRIPTION OF DRAWINGS

Referring to the drawings, an insurance arrangement according to the invention is shown.

The insurance arrangement, includes an algorithm and electronic processing means associated with a computing device adapted

(a) to generate, update, delete and store social, business and/or other connection details between entities in a network;

(b) to determine which entity in the network is requiring insurance;

(c) to separate underwriting questionnaires into fragments;

(d) to transmit these fragments to various entities that are connected in some way to the insuring entity for completion;

(e) to receive answers to the questionnaire fragments;

(f) to aggregate the fragments and determine the risk associated with insuring the risk; and

(g) to store results of the determinations.

The network includes social, business and/or other networks.

The arrangement is adapted to enable the electronic processing means to send the same underwriting fragment to various entities through the World Wide Web which are connected to the entity requiring insurance and comparing the received answers for patterns of consistency and therefore applying the appropriate weight to the questionnaire fragment when determining the risk associated with insuring the risk.

The arrangement is adapted to determine a rate for the insuring entity based on the risk determined.

The arrangement is adapted to receive past underwriting experience with associated past aggregated underwriting questionnaires and correlates this with the aggregated underwriting questionnaire for the insuring entity.

The arrangement is adapted to use correlations established to influence the rate for the insuring entity.

Some or all of the underwriting questions is based on psychometric principles to determine the personality type of the entity seeking insurance as determined by the network connections.

The arrangement is adapted to correlate the established psychometric result of the insuring entity to past psychometric results and associated underwriting experience, thereby influencing the rate for the insuring entity.

The arrangement is adapted to be used for underwriting, pricing and managing insurance, insurance plans and/or insurance products. The insurance arrangement thus provides for an insurance method, which includes the following steps performed by means of an algorithm and electronic processing means associated with a computing device:

(a) of generating, updating, deleting and storing social, business and/or other connection details between entities in a network;

(b) of determining which entity in the network is requiring insurance;

(c) of separating underwriting questionnaires into fragments;

(d) of transmitting these fragments to various entities that are connected in some way to the insuring entity for completion;

(e) of receiving answers to the questionnaire fragments;

(f) of aggregating the fragments and determine the risk associated with insuring the risk; and

(g) of storing results of the determinations.

The method includes the steps of sending the same underwriting fragment to various entities through the World Wide Web which are connected to the entity requiring insurance and of comparing the received answers for patterns of consistency and therefore applying the appropriate weight to the questionnaire fragment when determining the risk associated with insuring the risk. The method includes the step of determining a rate for the insuring entity based on the risk determined.

The method includes the steps of receiving past underwriting experience with associated past aggregated underwriting questionnaires and of correlating this with the aggregated underwriting questionnaire for the insuring entity.

The method includes the step of using correlations established to influence the rate for the insuring entity.

The method includes the step of basing some or all of the underwriting questions on psychometric principles to determine the personality type of the entity seeking insurance as determined by the network connections.

The method includes the step of correlating the established psychometric result of the insuring entity to past psychometric results and associated underwriting experience, thereby influencing the rate for the insuring entity.

The method is also adapted to be used for underwriting, pricing and managing insurance, insurance plans and/or insurance products.

According to the embodiment examples there is provided a system for underwriting, pricing and managing an insurance plan, the system including:

(a) electronic solicitation, collection and storing (on a server) of an electronic application form including personal, biographical, risk and other data ("the application data"); submission of the application data to an advanced pricing model which model, by means of modules, performs checks to ensure the data meets the insurer's criteria;

provision of access to an electronic underwriting platform ("EUP") should the system allow for coverage;

allowance for the insuring entity to identify connected entities to whom underwriting fragments could be sent to by the system, by providing for the entering of required information of the connected entities on the EUP or the enabling of the insuring entity to make contact with connected entities via the EUP for the purpose of sharing the underwriting fragment/s;

notification of the connected entity that an underwriting fragment needs to be completed and the directing of the connected entity to an electronic form which poses underwriting questions;

utilization of an advanced algorithm to maximize the value of the polling by fine-tuning the number of questions that each endorser needs to complete, in accordance with the insurer's needs;

allowance for completion by the connected entity of the underwriting fragment;

submission of the completed underwriting fragment to the EUP;

aggregation of the fragments to build complete underwriting profiles;

storage of the complete underwriting profiles;

transmission of complete underwriting profiles to the advanced pricing module ("the APM"); (I) detection of by the system of similar underwriting profiles in its database of biometric and psychometric data;

(m) referencing of past claims experience to the similar underwriting profiles; (n) transmission of past claims experience for similar underwriting profiles to the APM;

(o) supplementing of the standard pricing model with a price incorporating the claims experience using statistical methods to load, discount, keep static or change terms in the APM;

(p) storing of the offer; and

(q) transmission by the APM of the offer including pricing and terms to the insuring entity.

The electronic insurance application, the EUP, the random underwriting fragments and the insurance offer are hosted on the World Wide Web and where necessary the servers as indicated in Figure 1 .

The APM, traditional pricing engine, the database of biographical and psychometric data and database of claims experience are dealt with on the insurer's server as provided for in Figure 1 .

Various insurance plans are known to insure clients against certain perils in the case of short-term insurers and against certain life events in the case of long-term insurers. These insurance plans would typically consider the client's risk before offering an insurance product or covering the client in respect of either short-term insurance or long-term insurance. The quantum of the premium is usually determined by using a number of factors, in the case of short-term insurance, inter alia, the value of the item to be insured, the risk that the client poses by establishing whether and/or how many previous losses the client had and in the case of long-term insurance, inter alia, the lifestyle of the client, the medical history of the client and the medical history of the client's relatives.

A. Underwriting Information Gathering Embodiment

Referring to Figure 1 , an information gathering system will include step 1 , the completion of the application form on the website of the insurer by the insuring entity, which application form includes a number of modules to establish a pro forma risk profile for the insuring entity.

The system further includes steps which includes modules for the selection of connected entities by the insuring entity and modules for the random selection of underwriting questions ("underwriting fragment/s") about the insuring entity to be posed by the insurer, through the system by means of further modules, to the connected entities. Modules may be utilised to send a particular underwriting fragment more than once to different connected entities.

B. Random Underwriting Fragments Embodiment

In a further embodiment, the random underwriting fragments embodiment, the completed fragment modules resulting from the underwriting information gathering embodiment will be gathered through modules in random underwriting fragments, which fragments may be identical and certain modules will be utilised to compare these fragments with one another for consistency and appropriate weights will be associated to each fragment and the resulting fragment answer by certain modules. Modules will be utilised to compare similar questionnaire fragments for consistency and appropriate weights will be associated. The underwriting fragments may include psychometric techniques and modules will be utilised to determine the behavioural traits of the insuring entity to correlate risk aversion.

C. Electronic Underwriting Platform Embodiment

In another embodiment the random underwriting fragments will be embodied in the electronic underwriting platform of the insurer by means of certain modules.

D. Firewall & Router Embodiment

The Firewall and Router embodiment includes certain modules to ensure that the data gathered on the electronic underwriting platform will not cause any detriment to the insurer's server.

E. The Premium Determining Embodiment

An information processing and analysing system is included which includes various modules to enable the system to produce an accurate premium to the insuring entity.

The premium determining embodiment is located on the server of the insurer and includes an advanced pricing module, into which the aggregated underwriting data (which consist of the completed underwriting fragments) are transferred after passing through the firewall and router embodiment, by utilising certain modules. After the aggregated underwriting data was transferred by means of modules into the advanced pricing module, the data will be transferred by means of further modules to a database of biographical and psychometric data of various insured entities. The aggregated underwriting data may include psychometric techniques and modules will be utilised to determine the behavioural traits of the insuring entity to correlate to risk aversion.

Modules contained in the database of biographical and psychometric data will be utilised to retrieve profiles of insured entities within the database of biographical and psychometric data that are similar to the data of the insuring entity.

Upon retrieval of such profiles, by utilising further modules, these profiles will be linked to the relevant claims history of the particular insured party/ies profile/s.

The claims history will, by means of further modules be transferred as expected claims experience data of the insuring entity back into the advanced pricing module.

Subsequent to its transfer, the advanced pricing module will by means of modules obtain the standard pricing for an individual similar to the insuring entity from the traditional pricing engine.

The advanced pricing module will adjust the pricing by utilising modules to incorporate the effect of the expected claim experience data obtained to adjust the premium according to the insuring entity's risk profile.

The premium will be determined by utilising further modules and transmitted back to the insuring entity for consideration together with terms.