Insurance Companies and Innovation- Do Patents even play

a Role?
If you are not innovating, you are planning your exit- Paul Perreault
We live in an era of stifling competition where the only factor that sets apart the top
players from the rest is innovation. Innovation is one of the predominant factors that
decide the success of an organization. In this era where there are multiple vendors
offering the same set of services, it has become paramount for organizations to invest in
innovation, lest they want to be out of business.

With the exponential growth of technology in the past few centuries, even the nichest
among the niche areas are expected to have a technological intervention, tailoring the
field to keep up with the latest technological trends.

One among those areas where technology spilled its magic dust is insurance sector.
From paper to paperless, handwriting authentication to digital authentication systems,
visiting-the-insurance-office-a gazillion-times to having-all-the-information-in-your-
smartphone-a-click-away - the insurance industry has embraced innovation to enrich
lives and simplify things.

Technologys changing our lives every day. Insurance covers a majority of objects in
and around us. This left us to wonder how technology was playing its due part in the
insurance sector. What kind of disruptive/incremental innovation was taking place in the
insurance sector, harvesting the current technological trends?

To quench our curiosity, we decided to analyze the innovative measures of the top 50
insurance brands based on brand value.

Heres what we found:

Investing in Innovation- Everyone is doing it

Our analysis revealed that more than 40 of these companies invested their assets
towards innovative measures, be it in the form of in-house R&D, Partnerships, alliances
or launching accelerators and incubators dedicated to innovative measures.

Insurance companies kept up with the trends in technology and a majority of them had
already been a part of the digital revolution by bringing their processes online. But was
that it?

Fortunately No.
Getting systems on the online platform was just the beginning. The insurance sector
companies are embracing the technological intervention and innovating in areas,
keeping abreast with the progress in technology. Be it in the form of joining the IOT
race, embracing big data, leveraging artificial intelligence, investing in drones or being a
part of Blockchain revolution, the insurance sector companies are leaving no
technologies untouched.

Here are a few key observations from our analysis of innovative measures of these top
50 insurance corporations:

Telematics, IOT and analytics are the areas which primarily experienced the
highest innovation rate.
8 out of 50 companies had at least one app dedicated to analyzing the driving
performance of a person. TripSense, Drivewise, MyRate and GoodRide are few
among them.
Programs like SmartHome and GoodHome are proof of the fact that property
insurance companies leverage the IOT technology to monitor homes, while
ensuring appropriate insurance measures once an alarm goes off.
Ping An Insurance leads the Chinese markets in innovative efforts. From mining
social data to fostering digital models, from embracing technological solutions for
better analytics to insuring against loss of virtual properties in games, Ping An is
second to none when the discussion is on innovation.
Drones have caught the fancy of Insurance sector companies and these UAVs
are leveraged to survey everything, ranging from disaster-stricken areas to
monitoring agricultural lands, for risk assessment and faster claim handling.
Blockchain, the technology behind Bitcoin earned the interest of Insurance sector
too. In collaboration with three other companies, Swiss life Group invested in a
blockchain-centric venture in an attempt towards a smart contracting platform.

Analytics plays an important role in the majority of these companies, be it decision

making based on vehicular data, behavior characterization based on social data or
customer targeting based on petabytes of smart big data. The insurance sector
companies leverage analytics to improve insurance-related processes.

Do Insurance companies have Patents?

After we touched upon the innovative measures of these insurance sector companies,
the IP professional within made us ponder-

What about protection? Did these companies take enough steps to protect the R&D
dollars spent on innovation? Do these companies have patents?
We analyzed the patent portfolios of each of these 50 companies to find the answers to
our questions. The findings were, as a matter of fact, truly surprising and inconsistent
with the innovation measure statistics.

The analysis revealed that out of 50, 21 companies didnt file even a single patent
application. Surprisingly, out of these 21 non-filing organizations, 8 of them were based
out of and operated in China.

Our innovation measures analysis revealed satisfactory innovative measures from

Chinese corporations while Ping An ranked at the top of the list. Then, what could be
the reason behind the lack of patent filing activity by Chinese companies?

Upon digging further, we found that the reason behind the lack of patent protection for
the innovative measures of the Chinese insurance companies owes to the difficulty of
getting insurance-related patents granted. With strict laws, it is very difficult to get a
life/health related patent granted, which is a plausible explanation for the lack of
patenting activity by Chinese insurance organizations.

The non-patent filing companies also included three Asian companies while eight
European companies made to the list. The absence of patent filing activity might have
multiple reasons ranging from non-patentable subject matter to the lack of need of
protecting their innovation. Whatever might be the reason, it would suffice to say that
unlike innovation, protection of assets is the least thought about concept for some
companies within the insurance sector.

They have patents? Tell me more

Fortunately, the majority of insurance sector companies believe that

Innovation without protection is Philanthropy.

Our analysis revealed that 29 out of 50 companies invested assets towards protecting
their innovative measures.

But then it leaves us to question- For which kind of innovations was protection sought?
Which arena had the most patents filed in? Which countries were sought for protection?
Who had the largest number of patents?

Finding answers was relatively easy as we embarked on the search to find the role of
Patents within these companies.
What exactly was protected?

The insurance sectors innovation measures data revealed that every trending
technology had been explored by these companies and were leveraged to make
processes better.

But how many of these innovative measures were actually protected by means of
patenting activity?

Not many.

Though the innovative measures ranged across various technologies, the patent filing
data revealed that Telematics and Analytics were the prominent areas protection was
sought after. The majority of patents (449 to be precise) were filed under CPC
classification G06Q40/08, a class dedicated to protecting core insurance patents.

Further, Investment, Banking and Accounting were the next core areas in which most
of these patents were filed, which was a plausible move considering the domain in
question.

The interesting fact to note here was that big companies like Allstate realized the value
of patents and filed multiple patents to prevent its flagship products from being copied.
For instance, they filed 15 applications and had 11 patents under the G07C5 category,
the class primarily responsible for registering or indicating vehicular data to protect the
features of its flagship products: DriveWise and GoodRide.

The chart below reveals the top 12 categories in which the patents were classified. It
should be noted that a patent may be classified in more than one category and the
numbers were deduced accordingly.
 Investment 99

Office Automation 88

Banking 81

Resource Management 77

Data Processing 57

Marketing 51

Exchange(Stocks or Currency) 39

Healthcare 31

Telematics 28

Transactions 27

Accounting 15

Mobile Application Services 14

Traffic Control Systems for Vehicles 13

Navigation 8

The Potential Markets & Top Players

Geographical patent filing data can reveal a lot of insights regarding the markets of
interest for an organization based on the patenting activity. In case of insurance sector,
the markets of interest are the countries these companies operate in.

A look at the patent filing data revealed that 48% of these companies filed at least one
world application, hinting at the fact that companies were taking enough steps to not just
protect their innovation, but protecting their innovations at all the right places.

Our study also revealed that the majority of the patent applications were filed in the US
followed by Japan. It was interesting to note that 26 out of 29 companies had filed at
least one patent application in the US, whereas 11 out of 29 had at least one Japanese
patent application.

So who are the major filers in each of these markets?

The analysis of the applications filed from 1996- till date revealed that Hartford was the
clear winner in the US market after scoring 146 grants while having 232 pending
applications. Allstate is the most proactive at filing patents while enjoying a high grant
rate in the US, whereas European organization Swiss filed 99 applications in US out of
which it scored 49 grants.

Top Filers in US Market

US Patents Pending Applications

232

146

54 49 50 53
24 14 21 31
12 16

Hartford Allstate Swiss Re Prudential Travelers American

International
Group

Now that we know the top filers in the US, it is time to find out the top notch Japanese
filers. Unlike the US where companies from diverse nations conduct business, innovate
and protect, the Japanese Patent office largely received patent applications from the
companies that were based out of and operated in Japan.
 Major filers in Japan
Japanese Grants Pending Applications

92

76

45 44
38
31

14 16
10
5 2 4

Tokio Marine MS&AD Sompo Dai-ichi Nippon Japan Post

Tokio Marine filed the highest number of applications while MS&AD had the highest
number of granted patents. It should be noted that all of these Japanese organizations
filed at least 1 patent application in the US except Dai-Ichi and Japan Post Insurance,
whose protection measures are focused solely on the Japanese market.

The litigation landscape:

Now that we know the top filing geographies and the top players in each of these
markets, it is time to answer an unresolved query- How often did these companies
indulged in patent battles? Were there mere patent battles or frivolous patent wars too?

The analysis of the litigation behavior of these 50 organizations revealed that merely 5
companies had been in litigation as a plaintiff whereas 16 of them had played the role of
the defendant in at least one litigation. Allstate faced the highest number of lawsuits,
serving as a defendant for 37 litigation campaigns.

One interesting fact to note here is that majority of these defendants(with hundred
others) were targeted for infringing one single patent- US 5412730 titled Encrypted
data transmission system employing means for randomly altering the encryption
keys, by a patent troll TQP development LLC. Though the patent is being challenged at
Patent Trial and Appeal board currently, it will be worth watching whether any of these
companies would be relieved of this frivolous lawsuit or not.
 As Plaintiff As Defendant Neither plaintiff nor defendant

Having a look at the litigation landscape from a plaintiffs view, it made us ponder- How
good were the chances of being involved in a litigation? How good were the chances of
a patent being infringed by someone?

To find the answer, we evaluated the litigation probability of the patents of the top US
filers. The results revealed that the patent with the highest litigation probability was
US8489063 with a 51.6% probability of undergoing litigation.

Compared to other domains, the litigation score was pretty low, hinting the reason
behind the number of lawsuits raged as a plaintiff.

Though Innovation and protection are given preference by the majority of these
corporations, litigation will continue to remain in the shadows, unless the innovation rate
in the insurance sector grows at a rate such that it would get difficult for products to not
overlap on patents, like many technological fields in existence.

But thats a long way down the lane.

At the moment, the Insurance sector is growing at a good pace while embracing
innovation. It is up to the test of time to see if there would come an era when protection
would be given equal importance as that of innovation.