FORM-2 THE PATENTS ACT, 1970
(39 of 1970)
&
THE PATENTS RULES, 2003
PROVISIONAL
Specification
(See section 10 and rule 13)
A SYSTEM FOR CALCULATING VEHICLE INSURANCE PREMIUM
TATA CONSULTANCY SERVICES LTD.
an Indian Company
of Bombay House, 24, Sir Homi Mody Street, Mumbai 400 001,
Maharashtra, India
THE FOLLOWING SPEC IFICATION DESCRIBES THE INVENTION.

Field of the Invention:
The present invention relates to a system for calculating vehicle insurance premium.
This invention envisages a vehicle insurance premium calculation system that calculates the appropriate vehicle insurance premium by taking into account the distance traveled by vehicle.
Still particularly, this invention envisages a vehicle insurance premium calculation system where the distance parameter is calculated by collecting date, time, identity, vehicle information and distance traveled by vehicle on a weekly manner.
Background of the Invention:
Auto insurance is a highly mature market. Historically, this domain established different parameters to calculate the insurance premium for vehicles. This varies from make and model of the vehicle, driver's driving history, location, coverage limits, age of the driver, other personal information of the driver and driving conditions. But it was always noticed that while the static data are considered for mileage calculation, the dynamic usage data was not captured for premium calculation.
A principle problem with such conventional insurance determination systems is that much of the data gathered from the applicant is not verifiable,
and even existing records may not contain up-to-date information, much of

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which has little relevance towards an assessment of the likelihood of a claim subsequently occurring. In other words, current rating systems are primarily based on past realized losses. None of the data obtained through conventional systems necessarily reliably predicts the manner or safety of future operation of the vehicle. Accordingly, the limited amount of accumulated relevant data and its minimal evidential value towards computation of a fair cost of insurance has generated a long-felt need for an improved system for more reliably and accurately accumulating data having a highly relevant evidential value towards predicting the actual manner of a vehicle's future operation.
Description of the Prior Art:
Current auto insurance premium calculation is based on, make and model of the vehicle, driver's driving history, location, coverage limits, age of the driver, other personal information of the driver and driving conditions. This solution of mileage based premium is implemented by some companies using GPS and other technologies. But they are not scalable as the data collection becomes a complex task.
Objects of the Invention:
One object of the invention is to provide a system which includes dynamic parameters of a vehicle while calculating its insurance premium. This includes parameters like the distance traveled by the vehicle, mileage and the like.

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Another object of this invention is to provide a system which is adapted to use the dynamic parameters in conjunction with the static parameters for insurance premium calculation.
A further object of this invention is to provide a system which includes controller for data collection and data transmission to a server.
Still another object of this invention is to provide a system having means for collecting, storing, and delivering the dynamic data to a server for insurance premium calculation.
Yet another object of this invention is to provide a system which can have means to screen and evaluate the insurance premium for a particular vehicle.
SUMMARY OF THE INVENTION:
A particular embodiment in accordance with this invention provides an system that is adapted to solve the problem of differential premium calculation based on distance traveled by vehicle.
This system in accordance with this invention includes a wireless device. Distance traveled data is used for premium calculation. The wireless capable device in accordance with this invention collects the vehicle distance traveled data and stores it temporarily in its in built memory.
The device is used for inferring the vehicle usage by monitoring, aggregating, buffering and transmitting the relevant vehicle parameters

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including but not limited to speed, distance traveled, date and time, in a secure and tamper-proof manner.
Data is transmitted weekly to the central server and the data is collected by the insurance company server for further processing. The system includes an effective premium calculation rules engine which consolidates the data collected and calculation means for calculating the premium.
The system includes a vehicle distance capturing and processing system a unique solution focused on addressing the distance auto insurance premium calculation.
This system in accordance with this invention comprises an on board device in the vehicle for data capture and temporary storage, a server to receive the data from the device in accordance with this invention established at the insurer's IT premise and a premium calculation engine to calculate the premium periodically (at real time as well) and notify the insured. Other additional features such as fraud prevention, reporting layer, etc., will be implemented as part of the invention.
In accordance with additional embodiments of this device, it supports different functionalities including, authentication, strong tie up of vehicle and device, alteration or theft proof, remote data management, request based data pull, SMS based data transaction between the insured vehicle and the insurance company's gateway, remote device management and confirmation based reset data information. This device in accordance with this invention

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also comprises distance calculation module which stores the distance and time between every data exchange.
An additional embodiment of this invention discloses a server to receive smart card data and pre process the data for premium calculation. The security layer / authentication layer is part of the system to avoid fraudulent transaction. The primary function of this gateway is to act as a moderator between the device in accordance with this invention and insurance premium calculation engine. Data will be sent to the server via SMS.
The premium calculation engine in accordance with this invention receives the data from the server and process the data. Based on the usage and the effectiveness of the model, this engine can be customized to calculate a more accurate and precise premium based on distance traveled data.
In use, the system in accordance with this invention will assist an insurance carrier to instantaneously track the vehicle usage and the insured will receive premiums bills on a stipulated periodical basis.
Various options for collecting data are envisaged in accordance with this invention:
While USB and Smart card based solutions provide a medium ease of use to consumers, a Wireless solution provides a high level of ease of use to consumers. USB based solution is comparatively cheaper than the smart card and wireless solutions. Also, the returning cost to consumers for using the frequency/wireless network is substantially high for a wireless solution as

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opposed to USB and Smart card based solutions. The cost to insurance carriers is low in the case of USB and Smart card solutions, whereas it is high for a wireless solution. USB and Smart card based solutions have a low level of privacy related concerns. This is comparatively higher while using a Wireless solution. Further, USB and Smart card based solutions have a higher ease of routing the data to carrier back end as opposed to a wireless solution.
Applications which are enabled by this device in accordance with this invention include, but not limited to, charging of insurance premium based on vehicle usage, incentive planning for good driving behavior by fleet owners, Regulatory bodies, Transportation operators, Vehicle maintenance scheduling and other fleet management operations, etc.,
Brief Description of the Accompanying Drawings:
FIG. 1 shows a concept of a motor vehicle insurance premium calculation system with distance based premium calculation in place.
FIG. 2 relates to a flowchart showing an outline of the configuration of a car insurance premium calculation system with multiple solution options.
FIG. 3 relates to the architecture showing the operations by which on-board apparatus collects the distance traveled and sends the data to the service provider.

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Description of the Accompanying Drawings:
The present invention will be explained below with reference to diagrams. In the vehicle insurance premium calculation system according to the present invention, distance will be taken as one of the parameter for calculating the insurance premium.
Fig 1 illustrates the concept of the car insurance premium calculation system as per present invention. A user or driver of car (henceforth referred to as "user") subscribes to car insurance handled by car insurance company. When the user uses car, an on-board apparatus installed in car collects the data and stores them. Data collected via different channels are sent to Insurance provider. Insurance provider calculates the premium based on the distance data collected.
Fig 2 illustrates the data collection steps in various solutions considered i.e., Smart card based data transfer via utility provider, USB based data transfer via internet and SMS based data transfer via GSM network.
Fig 3 illustrates the data transmission by SMS via GSM network. This explains end to end architecture and interaction of different components of the system. The device in accordance with this invention is fitted into the vehicle. Data is transmitted to the insurance provider's database and server via a base control station and the operator's network. Here, it is queried upon and analyzed for appropriate insurance premium calculation.
While considerable emphasis has been placed herein on the specific steps of the preferred process, it will be appreciated that many steps can be made and

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that many changes can be made in the preferred steps without departing from the principles of the invention. These and other changes in the preferred steps of the invention will be apparent to those skilled in the art from the disclosure herein, whereby it is to be distinctly understood that the foregoing descriptive matter is to be interpreted merely as illustrative of the invention and not as a limitation.
Dated this 28th day of December, 2006.
Mohan Dewan
Of R.K.Dewan & Co
Applicants' Patent Attorney