Project Description
Requirements and Scope

In addition to this description, the instructor may be interviewed during the course of lectures for additional requirements and clarifications.

The project for this course is the production of a Business Information Model, Subject Area Model, and Conceptual Data Model of a (1) quote system for selected automobile insurance products and a (2) claim processing system in the insurance industry as pertains auto insurance.  Remember that the discussion at this high level is thoroughly conceptual; therefore we are talking about business entities and conceptual entities.  We are most certainly NOT talking about database tables (although I will briefly mention them as enimical to business strategy).  This project description is a preliminary attempt to communicate the various requirements for the new claim processing and quick quote system, for the purpose of providing enough information to give students a good idea of the scope and requirements of such a system in the real world.  This project description describes the Maroon Insurance Company of America, or MICA.

This requirements and scope description is not intended to provide you with the totality of information that will be necessary to produce your models and design.  You will need to supplement the information provided here with other information available in conversations with the instructor during class time as well as your own research from online sources.  In other words, this description is more of a guide to topics than an in-depth formal requirements specification.  For example, we will mention the insurance quote as a requirement.  Although we will give a brief description of what an insurance quote is, and we might mention the concepts of factors and rules, it is up to you to research further to fully understand the requirements surrounding auto insurance quotes.  You may visit existing sites for further information, including State Farm, Allstate, Geico, Progressive, etc.  For example, you may visit one of the companies listed and go through a QuickQuote scenario to see how one works.  What types of information are needed?

That said, there are several sources for additional information that may be useful.  There include:

Consumer Primer on Auto Insurance (Oregon but still generically useful)
Consumer Primer on Auto Insurance (Ohio)
Auto Insurance Information (Alabama)
Consumer Primer on Auto Insurance (Arizona)
Auto Insurance Information Center (private)
Progressive Commercial Auto
http://www.ambest.com/resource/glossary.html
http://www.irmi.com/forms/online/insurance-glossary/terms.aspx
Information on Automobile Insurance
Policy Pricing Information
Auto Insurance Coverages
Auto Insurance Basics

If we understand (and for our purposes we DO) a policy as a product ORDER (and is an Order a Contract?), it might make sense to analyze a few orders to see what types of attributes accrue:

Sample Auto Policies:  Sample 1, Sample 2, Sample 3, Sample 4

Essentially, your main task on the conceptual front is to scour through existing universal data models both in Hay's Data Model Patterns and Silverston's Data Model Resource Book, Volume 1 for those conceptual entities that you feel will prove helpful in your analysis.  As a helpful start, you would want to focus on Hay's notion of contract and Silverston's notion of an Agreement; both views on people and organizations; both views on products (Hay categorizes products under Things of the Enterprise); Silverston's notion of a Quote (Ordering Products); Work Efforts (Silverston and Hay has a notion under Procedures and Activities), etc.

The insurance business is basically a form of financial services, with a focus on risk management associated with health, life, property, casualty, etc.  Insurance companies usually focus their efforts in a few specific areas (such as auto, P&C, health, life, etc.), but they all are concerned with several common generic issues, including:

Who are our customers and what are their insurance needs?
What product mix and product definitions do we need to satisfy our customers' needs?
What product features do we need to offer?
How do we maximize revenues while at the same time controlling our own risk exposure?
What types of organizations and individuals do we need to interact with?
How do we define policies as agreements and coverages?
How do we handle claims from our customers?
What constitutes a customer?
How do we bill premiums, what is the schedule?
What roles and relationships can we define for the organizations and individuals that we interact with?

Automobile insurance is a specialized form of Property Insurance, which is a part of Property & Casualty Insurance (P&C).  The Automobile Insurance Division of MICA offers a number of different coverage types, including bodily injury, comprehensive, and collision.  Coverages can specify a range of limits from say $100,000 to $500,000.  Additionally, coverages can apply either selectively, optionally, or as required.  An example of a selectable coverage might be bodily injury.  An example of an optional coverage may be collision, which specifies a particular coverage amount, say of up to $10,000, for which the deductible might be $500 per year.  Some coverages may specify levels of coverage where for example a comprehensive coverage might apply per incident, or a bodily injury coverage might apply on a per person, per occurance, basis.

Conceptual Strategy:  While the first application of MICA will be automobile insurance, the company demands that it's information architecture be designed to account for flexible growth.  For example, generic concepts such as Agreement, Agreement Item, Agreement Terms, Agreement Pricing, Quotes, Product Definition, Product Category, Product Features, Product Pricing, Policy Issuance, etc. should be generic enought to support an insurance quote on ANY insurance product with any types of features and coverages, from P&C areas such as commercial assets, inland marine, umbrella, workers compensation, to personal property dwellings, inland marine, personal liability, watercraft, etc.  In addition to providing generic support for the varieties of P&C insurance, both commercial and personal, the model you produce should also be generic enough to support non-P&C insurance products, including health, accident, sickness, unemployment, disability, life and limb, business interruption, all the way to pet insurance.  What this means is that no entity you identify should be specific such as "Car Owner" (generic equivalent would be "Insured Party").  It also means that product should be categorized by insurance type category (we'll only be using "Auto Insurance"), such as Property Insurance with subtypes such as "home owners insurance", "auto insurance"; Casulty Insurance with subtypes such as "accident insurance", "natural disaster", etc.  So even though the only specific insurance product that needs to be fully modeled is automobile insurance, your model should be generic enough to support the full form of available types of insurance, so we don't have to reinvent the wheel every time we want to enter a new market.  You will find that universal data models will help you immensely in keeping with such a generic predisposition.

Several conceptual entities from Volume 1 of Silverston may be directly leveraged in your analysis.  However, in most cases, you will need to identify new ancillary concepts and types in addition to the generic ones listed in Volume 1.  Examples would include entities from people and organizations (ch. 2), where  you will need to add in additional roles and relationships to support the insurance industry (e.g., claims adjuster, agents, beneficiaries, primary insureds, etc.).  Other examples include the agreement model (ch. 4), where you will need to add in specifics around insurance policies qua agreements .  Product models (ch. 3) will require more surgery, as you will need to account for premium schedules, insurance rates and underwriting, as well as the full claims processing model.

Business Description

Insurance companies need to keep track of things just like any other business.  They need to manage information pertaining to their customers ("insureds"), their vendors, their products, their employees, their subsidiaries and agents, and possibly, their competitors.  MICA needs to focus on keeping track of its customers, products, employees, and agents.  We're going to leave competitors and vendors out of the equation for the moment, as we are going to pretend we are big enough to fund internally our own products from our investors.  That is to say, we are not a reinsurer or agent broker.

Now, in all this, remember that our focus is not just on providing auto insurance.  We want a generic model created so that the product architecture is flexible enough to handle not only auto insurance but in the future a vast array of insurance products.

In addition to keeping track of our customers, we need to also keep track of how to contact them, the various ways in which we may get in touch with them, as well as who is related to the customers, as far as emergency contacts, etc.