The vehicle insurance industry has long grappled with the complex, stressful, and time-consuming steps for settling damages caused by car accidents. These persistent challenges prompted insurers to seek for a solution enabling them to resolve the settlement decisions based on parties’ agreements consistently and quickly.
As a response to these challenges, an innovative agreement was introduced by Belgian car insurance companies called the “RDR (Rapid Disaster Response) convention,” which allows direct settlement between insurance companies of the involved parties without the insured parties’ involvement.
This convention simplifies the steps of settling damages caused by car accidents. While this agreement is voluntary, 98 percent of the insurance market in Belgium has joined the convention. Therefore, there is no doubt about the success of this initiative.
Hence the insurers are acting on behalf of the insured parties, many business rules are in place to qualify for the RDR convention to settle damage. Once they satisfy those business rules, RDR settlement can proceed with relevant information. Otherwise, the claim will be passed to experts to make a decision about the situation manually.
Let’s have a look at this successful decision model and understand its steps better.

Rapid Disaster Response (RDR) Decision

According to the Direct Settlement Convention, once the insurance company verifies that all prerequisites have been met, it will determine the liability position of the car accident. This includes two major steps:

  1. RDR Clearing Eligibility
  2. Vertical Decision Table

Based on these decisions, the car accident liability position will be determined.

  1. RDR Clearing Eligibility

    2. To determine RDR Clearing Eligibility, two decisions will be involved:

    • Counterparty Object RDR Eligibility
    • Car Accident RDR Eligibility

     
    The decision Table below shows the implementation of determining the Counterparty Object RDR Eligibility. This decision has two possible outputs: “Eligible” or “Not Eligible.”
     

  2. Car Accident Liability

    3. To determine Car Accident Liability, both parties’ circumstance gravities will be considered in the following decision nodes.

    • Insured Customer Accident Circumstances
    • Counterparty Accident Circumstances

     
    Once determining those circumstances gravities, the Car Accident Liability will be determined in a sub-graph that includes the two decision nodes: the insured customer’s highest circumstance gravity and the counterparty’s highest circumstance gravity.

    The car Accident Liability Decision Table will be as follows:
     

    This decision can have four potential outcomes: “Insured Customer Liability,” “Counterparty Liability,” “Shared Liability,” or “Liability Cannot Be Determined.”

Outcome (Determine Car Accident Position)

As the final step, the RDR Car Accident Position decision table determines the liability position of the car accident as the outcome of the model, which can be either “RDR – Insured Customer Liability,” “RDR – Counterparty Liability,” “RDR – Shared Liability,” or “No RDR Applicable.”

All these decision nodes can be incorporated into one Decision Graph. The outcome of this model is represented at the top decision nodes (RDR Car Accident Position)- Information used as input data is represented on round rectangles with pink color.

Decision Graph
As you can see in the above model, making and reusing decision nodes as part of a larger decision graph makes the models far easier to maintain, understand and explain.

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Benefits of this Approach

Abstract Level: This executable decision orchestration provides a higher-level abstracted layer that lets you see the big picture first rather than diving deep into implementing car accident settlement logic.

Straight-Through Processing: FlexRule enables car insurance companies to apply straight-through processing techniques using end-to-end decision management and streamline the Car Accident Direct Settlement by determining the Car Accident Liability Position.

Executability and validation capability: By facilitating the decision model, FlexRule® Advanced Decision Management Suite supports simulation and execution, error checking at design time, and runtime, with debugging capability.

Explainability: A simple visual modeling technique using Decision Graph and a tabular form to model business rules facilitates improved communication among business stakeholders, domain experts, and IT by enabling the productive involvement of business individuals and subject matter experts.

Scalability: FlexRule authoring platform enables the scalable implementation of business rules through a reusable and easily manageable visual approach across applications. This scalability enables quick adaptations to settlement policies, regulations, or business requirements changes. This agility allows organizations to stay up-to-date and adjust efficiently.

Decision as a Service: FlexRule enables well-defined decision boundaries and provides a convenient way to expose decisions as a service with just a click.

Last updated June 19th, 2023 at 11:22 am, Published June 16th, 2023 at 11:22 am