SYSTEM AND METHOD FOR PROVIDING REVENUE PROTECTION BASED ON WEATHER DERIVATIVES AND MERCHANT TRANSACTION DATA

• US 20160086284A1
• Filed: 09/19/2014
• Published: 03/24/2016
• Est. Priority Date: 09/19/2014
• Status: Active Grant

• Current Assignee: Mastercard International Incorporated (MasterCard Incorporated)
• Original Assignee: Mastercard International Incorporated (MasterCard Incorporated)
• Inventors: Ghosh, Debashis, Shuken, Randall K., Lesbirel, Mary E.
• Granted Patent: US 9,691,104 B2
• Time in Patent Office: Days
• US Class Current: 1/1
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Processor-executable methods, computing systems, and related processing for the creation, transaction, administration, management and communication of data relating to weather-related guarantees or revenue protection policies for mitigating the risk of loss of recurrent merchant revenue due to one or more weather conditions, based on analysis of revenues resulting from payment card transactions associated with the merchant.

Claims

1. A computer-implemented method for determining pricing for insurance protection for merchants against one or more weather conditions, comprising:

determining via a computer processor, recurring merchant revenue for a given merchant over a given time interval based on payment card transaction record data of payment card transactions conducted over a payment card network and corresponding to said merchant;

generating via a computer processor, merchant revenue profile data representative of changes in recurring merchant revenue as a function of one or more weather parameters, by applying historical weather data to the merchant payment card transaction record data, the historical weather data being matched to the location of the merchant business and the date and time of the payment card transaction records;

generating an offer of insurance covering a term and including a payout amount and including one or more weather-specific payout conditions, based on the merchant revenue profile data and the recurring merchant revenue data.

2. The method of claim 1, further comprising storing in a database data corresponding to the one or more weather-specific payout conditions of the insurance agreement.

3. The method of claim 2, further comprising comparing one or more weather conditions during at least part of the term with weather-specific conditions of the insurance agreement, for determining whether an insurance payout is required.

4. The method of claim 3, further comprising:

storing in a data base payment card transaction records of a plurality of merchants; and

processing the payment card transaction records via an analytics engine utilizing statistical analyses and techniques for categorizing merchants and generating one or more revenue profiles based on aggregated merchant payment card transactions data of a plurality of merchants of a the same category.

5. The method of claim 4, further comprising determining aggregate demand for said insurance according to the number of merchants within a given category and a given geographical region based on said processing of the payment card transactions data.

6. The method of claim 5, further comprising obtaining from a third party one or more weather-related contracts, the volume of said weather-related contracts corresponding to the aggregate payout amount of the weather-specific offers of insurance, the one or more weather-related contracts corresponding to the geographic regions and weather parameters associated with the weather-specific offers of insurance;

and allocating portions of the value of the one or more weather-related contracts to the weather-specific offers of insurance.

7. The method of claim 6, wherein the payment card transaction data includes at least a customer identifier, merchant identifier, transaction amount, geographic region, and transaction date.

8. The method of claim 1, wherein said one or more weather parameters comprises one or more of temperature, solarity, and precipitation.

9. A system for generating offers of insurance on payment card transactions for protection against weather or other natural phenomenon, the system comprising:

one or more data storage devices containing payment card transaction data of a plurality of merchants, the payment card transaction data including at least customer information, merchant information, date and time, and transaction amounts;

one or more processors;

a memory in communication with the one or more processors and storing program instructions, the one or more processors operative with the program instructions to;

analyze said payment card transaction data of one or more merchants of a given type and geographic region over a given time period to determine recurring merchant revenue;

apply historical weather data to the merchant payment card transaction record data to generate via a computer processor, merchant revenue profile data representative of changes in recurring merchant revenue as a function of one or more weather parameters, the historical weather data being matched to the location of the merchant business and the date and time of the payment card transaction records;

generate an offer of insurance covering a term and including a payout amount and including one or more weather-specific payout conditions, based on the merchant revenue profile data and the recurring merchant revenue data.

10. The system of claim 9, wherein the one or more processors is operative with the program instructions to store in a database data corresponding to the one or more weather-specific payout conditions of the insurance agreement.

11. The system of claim 10, wherein the one or more processors is operative with the program instructions to compare one or more weather conditions during at least part of the term with weather-specific conditions of the insurance agreement, for determining whether an insurance payout is required.

12. The system of claim 11, wherein the one or more processors is operative with the program instructions to:

store in a data base payment card transaction records of a plurality of merchants; and

process the payment card transaction records via an analytics engine utilizing statistical analyses and techniques for categorizing merchants and generating one or more revenue profiles based on aggregated merchant payment card transactions data of a plurality of merchants of the same category.

13. The system of claim 12, wherein the one or more processors is operative with the program instructions to determine aggregate demand for said insurance according to the number of merchants within a given category and a given geographical region based on said processing of the payment card transactions data.

14. The system of claim 13, wherein the one or more processors is operative with the program instructions to obtain from a third party one or more weather-related contracts, wherein the volume of said weather-related contracts corresponds to the aggregate payout amount of the weather-specific offers of insurance, the one or more weather-related contracts corresponding to the geographic regions and weather parameters associated with the weather-specific offers of insurance;

and wherein the processor allocates fractional portions of the value of the one or more weather-related contracts to the weather-specific offers of insurance.

15. The system of claim 14, wherein the payment card transaction data includes at least a customer identifier, merchant identifier, transaction amount, geographic region, and transaction date.

16. The system of claim 9, wherein said one or more weather parameters comprises one or more of temperature, solarity, and precipitation.