Patent ID: 7827046

Claim:
A computer implemented method for transitioning a block of insureds from a first rating algorithm A to a second rating algorithm B, said block of insureds comprising one or more insured drivers, said method comprising: a) receiving by said computer a length of transition period n o ; b) calculating by said computer a premium for each one of said insured drivers, said premium being for a given term n during said transition period wherein said premium is greater than or equal to the premium Pt n , given by the equation: Pt n =Pb n −Tf n *( Pb n −Pa o ) wherein; i. Pb n is the premium for term n of the transition period calculated by said algorithm B; ii. Tf n is a transition factor for term n; and iii. Pa o is the premium for term 0 of said transition period calculated by said algorithm A; and c) outputting said premium to an insurance agent offering said insurance to said insured driver wherein Tf n is chosen such that the change in said premium Pt n from the prior premium Pt (n-1) is a normal change in premium for the majority of said insured drivers and wherein said transition factor Tf n is given by the equation: Tf n = ( 1 - n n o ) W where W is a shape parameter in the range of ½ to 2.