Financial activity based on tropical weather events

• US 20060155628A1
• Filed: 12/20/2005
• Published: 07/13/2006
• Est. Priority Date: 12/21/2004
• Status: Active Grant

• Current Assignee: Weather RISK Solutions LLC
• Original Assignee: Weather RISK Solutions LLC
• Inventors: Horowitz, Kenneth A.
• Granted Patent: US 7,584,133 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A financial activity network includes a central managing system connected to a plurality of participant terminals. Rules governing operation of the financial activity are stored for future reference. A participant provides investment information such as a map location for the predicted strike by the natural event and, optionally, one or more secondary parameters relating to the natural event, such as the time interval between the time of investment and the time of all event strike and/or the severity of the event strike according to an established scale. In one example, an external objective independent information source is consulted, with the external objective independent information source providing monitoring, interpretation and derived determination of parameters pertaining to the natural event. Methods and articles of manufacture are also disclosed.

Claims

1. A method of conducting a financial activity between a provider and a plurality of participants, based on a tropical weather event, comprising:

a method for obtaining the participants'"'"' prediction data of a predicted outcome of the tropical weather event;

a method for obtaining the participants'"'"' investment funds;

a method for pooling the participants'"'"' investment funds in a common pool;

a method for obtaining from an external independent information source, external information concerning the tropical weather event;

a method for comparing the participants'"'"' prediction data to the external information to determine if a matching outcome exists; and

a method for distributing funds from the pool to participants having a matching outcome.

2. The method according to claim 1 wherein the participants having a matching outcome share equal distributions from the pool.

3. The method according to claim 1 further comprising assigning values to the participants based upon a matching outcome of the comparing step;

and

wherein distributing funds comprises distributing funds from the pool to participants having a matching outcome according to their assigned values.

4. The method according to claim 1 wherein obtaining the participants'"'"' investment funds comprises setting an investment price for each participant.

5. The method according to claim 4 further comprising applying at least one variability factor to at least one of said investment price and said distributed funds.

6. The method according to claim 5 wherein said at least one variability factor comprises at least one of said time interval between a participant'"'"'s investment and an occurrence of the tropical weather event and a probability of a matching outcome of the participant'"'"'s predicted outcome at the time of investment.

7. The method according to claim 1 wherein obtaining external information comprises obtaining information concerning at least one of said landfall and said land track of said tropical weather event.

8. The method according to claim 1 further comprising obtaining from the external independent information source prediction data concerning the tropical weather event.

9. The method according to claim 7 wherein the tropical weather event comprises tropical cyclones occurring in the United States and its territories and possessions.

10. The method according to claim 3 further comprising applying at least one variability factor according to multiple stages of probability assessment to said distribution for each participant having a matching outcome, said multiple stages of probability relating to different probabilities of a matching outcome at different points in time.

11. The method according to claim 1 wherein distributing funds from the pool to participants having a matching outcome comprises applying the same set of rules to all participants for determining their distribution funds.

12. The method according to claim 1 further comprising obtaining from the external independent information source historical data regarding past tropical weather events of the type of the tropical weather event.

13. The method according to claim 1 wherein the provider does not engage in the financial activity as a participant.

14. The method according to claim 1 wherein obtaining the participants'"'"' investment funds comprises setting an investment price for each participant, with the prices at any given time for the same predicted outcome being the same for all participants.

15. The method according to claim 1 further comprising determining the participants'"'"' eligibility to engage in the financial activity.

16. The method according to claim 15 wherein determining the participants'"'"' eligibility to engage in the financial activity comprises determining the skill of the participant relevant to an understanding of tropical weather events.

17. The method according to claim 15 wherein determining the participants'"'"' eligibility to engage in the financial activity comprises defining an area of a tropical weather event and obtaining information concerning the participants'"'"' property rights in the area of the tropical weather event.

18. The method according to claim 15 further comprising determining the participants'"'"' eligibility to engage in the financial activity by obtaining answers from the participant in response to questions relating to tropical weather events.

19. The method according to claim 15 wherein determining the participants'"'"' eligibility to engage in the financial activity comprises obtaining financial data concerning the participant.

20. The method according to claim 1 further comprising obtaining the identity of the participant.

21. A method for a participant to engage in financial activity including a plurality of other participants, conducted by a provider, based on a tropical weather event, comprising:

a method for the participant to receive information pertaining to the tropical weather event;

a method for the participant to provide prediction data and investment funds pertaining to the outcome of the tropical weather event;

a method for the participant to obtain an indication from the provider pertaining to a matching outcome of a comparison of the participants'"'"' prediction data to tropical weather event data from an external independent information source; and

a method for the participant to receive funds from a common pool comprising, at least in part, the participant'"'"'s investment funds.

22. The method according to claim 21 further comprising the participant receiving a value from the provider based upon a matching outcome, with the funds received by a participant distributed according to said value.

23. The method according to claim 21 wherein providing investment funds comprises receiving an investment price from the provider and paying investment funds according to said investment price.

24. The method according to claim 23 further comprising applying at least one variability factor to one of said investment price and said amount of funds from the common pool received by participants having a matching outcome.

25. The method according to claim 24 wherein said at least one variability factor comprises at least one of said time interval between a participant'"'"'s investment and an occurrence of the tropical weather event and a probability of a matching outcome of the participant'"'"'s predicted outcome determined at the approximate time of investment.

26. The method according to claim 21 further comprising determining the participants'"'"' eligibility to engage in the financial activity.

27. The method according to claim 26 wherein determining the participants'"'"' eligibility to engage in the financial activity comprises determining the skill of the participants relevant to an understanding of natural events of the type of the natural event.

28. The method according to claim 26 wherein determining the participants'"'"' eligibility to engage in the financial activity comprises defining an area of the natural event and obtaining information concerning the participants'"'"' property rights in the area of the natural event.

29. The method according to claim 26 further comprising determining the participants'"'"' eligibility to engage in the financial activity by obtaining answers from the participants in response to questions relating to natural events of the type of the natural event.

30. The method according to claim 26 wherein determining the participants'"'"' eligibility to engage in the financial activity comprises obtaining financial data concerning the participants.

31. A system for conducting a financial activity based on a tropical weather event, comprising:

a financial activity module for facilitating financial activity between a provider and a plurality of participants, for receiving external tropical weather event information from an external independent information source and for providing financial activity information to the participants;

at least one communication module for communication between the financial activity module and an external independent information source for receiving the external tropical weather event information from the external independent information source;

the at least one communication module further providing communication between the financial activity module and the participants, to receive prediction data from the participants pertaining to the tropical weather event;

a comparing module for comparing the participants'"'"' prediction data to the external tropical weather event information and for providing an indication of a matching outcome to the participants; and

a distribution module for distributing funds from a common pool of funds collected from the participants, to participants having a matching outcome.

32. The system according to claim 31 wherein the at least one communication module further comprises an arrangement for communicating to each participant an indication of the time at which the provider received one of said participants'"'"' prediction data and said participant'"'"'s payment if the investment price.

33. An article of manufacture including a machine readable medium for causing a computer system to conduct a financial activity between a provider and a plurality of participants, based on a tropical weather event, comprising:

a module for conducting financial activity between a provider and a plurality of participants, for receiving tropical weather event information from an external independent information source and for providing financial activity information to the participants;

at least one communication module for conducting a communication activity communicating between the financial activity module and an external independent information source for receiving tropical weather event information from the external independent information source;

the at least one communication module communicating between the financial activity module and the participants to receive prediction data from the participants, pertaining to the tropical weather event;

a module for comparing the participants'"'"' prediction data to the indication of the occurrence of the tropical weather event; and

the at least one communication module further communicating between the financial activity module and the participants to provide to the participants an indication of a matching outcome based upon a matching outcome of the comparing step and to indicate to the participants having a protective outcome from the comparing step, the portion of funds to be paid from a common pool collected from the participants.