Modeling an insurance policy lifecycle

This Business Data Model (BDM) example explains how agreements can be modeled over their lifecycle.

Business scenario

A customer, John, is looking for a quotation for life insurance and is made an offer. John accepts the offer and is issued with his new Life insurance policy. After the policy was issued, John changed address and notified the insurer. The business requirement is to record the insurance agreement throughout its lifecycle from initial quotation through to policy issuance. The example here will also illustrate the impact of nonpolicy status changes on a policy.

Modeling the business scenario

This Business Data Model (BDM) example shows how agreements can be modeled over their lifecycle.

Before you begin

  • Review Modeling an insurance policy lifecycle in the Atomic Warehouse Model.
  • If you want to re-create this example, open BDM in your data modeling tool.
  • The example is also available under the Business Pattern sections, in the diagram Modeling an insurance policy lifecycle in the Business Examples package of BDM.

Example

The business scenario can be met using entities from the:
  • Agreement package:
    • Agreement
    • Financial Services agreement
    • Top-level financial services agreement
    • Insurance policy
    • Individual agreement
    • Individual life insurance policy
  • Agreement request package:
    • Agreement request
    • Financial services request
    • Status change request
    • Contractual content change request
    • Agreement request- agreement Rlship
Figure 1. ERD example for Modeling an insurance policy lifecycle, including the agreement and agreement request packages in BDM
ERD example for Modeling an insurance policy lifecycle, including the agreement and agreement request packages in BDM
Agreement
An agreement is a core entity which captures that two parties commit to fulfill an obligation. In this case of life insurance policy, the insurer undertakes to pay a lump sum or benefit in the event of the death of the life insured under the policy. An agreement at the proposal stage is an agreement with a policy status of 'draft' or 'offered'. In this scenario, the type of financial services agreement is a life insurance policy for an individual.
Agreement Request
This entity records requests for new policies or quotes or changes to existing policies or quotes. This represents the instruction to amend a new or existing agreement i.e. John will make a request for a quotation or John requests a change to his policy to change the address. For this scenario, a number of financial services requests are made on the agreement.
  1. John requests a quote.
  2. John accepts the offer for the life insurance quotation and this status change request is recorded.
  3. The policy is issued or bound, and a policy status of 'in force' is reflected on the agreement.
  4. John issues a contractual content change request (a change of address). In this instance, the status of the policy/agreement has not changed as the change was not material to the agreement.