Financial activity concerning tropical weather events

• US 7,783,544 B2
• Filed: 10/31/2007
• Issued: 08/24/2010
• 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.
• Primary Examiner(s): Borlinghaus; Jason M
• Application Number:
  US11/981,790
• Publication Number:
  US 20080133430A1
• Time in Patent Office: 1,028 Days
• Field of Search: None
• 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 graphical user interface for a financial activity network that 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. The graphical user interface provides the user with the ability to select options and view data from a screen display, with recalculations of data being displayed on an ongoing basis, reflecting the user'"'"'s current selections.

Claims

1. A computerized method of price setting throughout a substantially continuous ongoing natural process starting with a reported precursor event and culminating in a future natural peril landstrike, for the purchase of derivative securities interests predicting the eventual outcome of the future natural peril landstrike on one of a plurality of geographical areas, comprising:

the derivative securities interests comprising a prediction of the eventual outcome of the future natural peril landstrike as a combined call on one geographical area predicted to be struck by the future natural peril landstrike and a put on all other geographical areas;

providing a database containing a) historical precursor data collected from at least one historical precursor event leading to an historical natural peril landstrike, and b) first premiums to purchase a derivative securities interest predicting an eventual outcome of the future natural peril landstrike for the plurality of geographical areas, that are based at least in part upon a calculated probability predicting an outcome of the historical precursor data as the future natural peril landstrike;

electronically making the first premiums available to prospective purchasers at a communication port, prior to an announcement of the reported precursor event;

electronically receiving notification of the reported precursor event from an external and verifiable notification source; and

responsive to receiving notification of the reported precursor event, and throughout an ongoing duration of the reported precursor event, making available to prospective purchasers via the communication port, a series of secondary premiums to purchase derivative securities interests predicting the eventual outcome of the future natural peril landstrike, and with initial secondary premiums in the series based at least in part on the first premiums.

2. The method of claim 1 wherein the derivative securities interests comprise one of said futures contract, said options contract and said option on futures contract.

3. The method of claim 1 further comprising electronically offering to prospective purchasers, prior to an announcement of the reported precursor event, an initial series of premiums, at least one of which is the first premium, to purchase derivative securities interests predicting the eventual, outcome of the future natural peril landstrike.

4. The method of claim 3 wherein the initial secondary premium is based at least in part on the price offered at the conclusion of the initial series of premiums.

5. The method of claim 1 further comprising:

electronically assigning a value to derivative securities interests purchased;

determining the outcome of the future natural peril landstrike; and

assigning a portion of the value to derivative securities interests predicting the determined outcome of the future natural peril landstrike.

6. A computerized system of price setting throughout a substantially continuous ongoing natural process that starts with a reported precursor event and culminates in a future natural peril landstrike, for the purchase of derivative securities interests predicting the eventual outcome of the future natural peril landstrike on one of a plurality of geographical areas;

comprising;

a database containing historical precursor data collected from at least one historical precursor event leading to an historical future natural peril landstrike;

pricing data for electronically calculating and at least temporarily storing a first premium to purchase a derivative securities interest predicting the eventual outcome of the future natural peril landstrike, the derivative securities interest comprising a combined call on a selected geographical area predicted to be struck by the future natural peril landstrike and a put on all other geographical areas, the first premium being based at least in part upon a calculated probability predicting an outcome of the historical precursor data as the future natural peril landstrike;

a communication port for performing at least one of;

a) electronically making a premium available to prospective purchasers, b) receiving a commitment from a prospective purchaser to purchase a derivative securities interest predicting an eventual outcome of the future natural peril landstrike and c) electronically receiving notification of the reported precursor event from a notification source that is external and verifiable, and thereafter making the notification of the reported precursor event available to prospective purchasers via the communication port; and

a storage for current pricing data, electronically making available to prospective purchasers via the communication port, throughout an ongoing duration of the reported precursor event, a series of secondary premiums to purchase derivative securities interests predicting the eventual outcome of the future natural peril landstrike, and with an initial secondary premium in the series based at least in part on the first premium.

7. The system of claim 6 wherein the derivative securities interests comprise one of said futures contract, options contract and said option on futures contract.

8. The system according to claim 6 further comprising valuing data for electronically assigning a value to the derivative securities interests purchased, determining the outcome of the natural event and assigning a portion of the value to the derivative securities interests predicting the determined outcome of the future natural peril landstrike.

9. An article of manufacture including a machine readable medium for causing a computer to perform a computerized method of price setting throughout a substantially continuous ongoing natural process starting with a reported precursor event and culminating in a future natural peril landstrike, for the purchase of derivative securities interests predicting the eventual outcome of the future natural peril landstrike on one of a plurality of geographical areas, comprising:

the derivative securities interests comprising a prediction of the eventual outcome of the future natural peril landstrike as a combined call on one geographical area predicted to be struck by the future natural peril landstrike and a put on all other geographical areas;

providing a database containing a) historical precursor data collected from at least one historical precursor event leading to an historical natural peril landstrike, and b) first premiums to purchase a derivative securities interest predicting an eventual outcome of the future natural peril landstrike for the plurality of geographical areas, that are based at least in part upon a calculated probability predicting an outcome of the historical precursor data as the future natural peril landstrike;

electronically making the first premiums available to prospective purchasers at a communication port, prior to an announcement of the reported precursor event;

electronically receiving notification of the reported precursor event from an external and verifiable notification source; and

responsive to receiving notification of the reported precursor event, and throughout an ongoing duration of the reported precursor event, making available to prospective purchasers via the communication port, a series of secondary premiums to purchase derivative securities interests predicting the eventual outcome of the future natural peril landstrike, and with initial secondary premiums in the series based at least in part on the first premiums.