On-line reinsurance capacity auction system and method
First Claim
1. A method for auctioning reinsurance products electronically over a communication network, comprising the steps of:
- identifying a reinsurance product based on information stored in a database associated with a system;
determining, by a server, capacity of the reinsurance product to be sold;
offering, by the server, the reinsurance product for sale through an auction;
accepting, by the server, bids from reinsurees for at least a portion of the capacity, wherein the step of accepting bids includes,providing, through the communication network, a status for the bids of the reinsurees, the status comprising one of OK, Partial OK, and Excluded, the status OK representing that a bid will be accepted the status Partial OK representing that only a portion of the capacity in a bid will be filled, and the status Excluded representing that a bid will not been accepted, andranking, by an auction ranking element engine, the bids of the reinsurees, wherein the ranking of the bids at least considers a calculated profitability value and a time stamp associated with each of the bids an older time stamp resulting in a higher ranking for a given bid and a higher calculated profitability resulting in a higher ranking for a given bid, and where profits for a provider of the reinsurance product are maximized by selecting from pending and newly entered bids, the bids that are most profitable;
setting, by the server, a reference price for the reinsurance product;
defining, by the server, a ratio of a bid to the reference price that defines a variable index;
using, by the server, the variable index to define profitability, wherein remaining capacity of the reinsurance product is sold when the variable index is below 1;
electronically consummating a contract, using the communication network, for the sale of at least a portion of the reinsurance product to holders of winning bids, and assigning each of the winning bids a status of OK denoting denotes acceptance of a bid, or a status of Partial OK denoting only a portion of requested capacity will be filled; and
ending, by the server, the on-line auction in response to a determination that the capacity is consumed or a predefined date and time is reached, even if all of the capacity has not been sold.
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Accused Products
Abstract
A system and method of selling reinsurance includes identifying a reinsurance product and a capacity of the reinsurance product to be sold and calculating a fair risk price for the reinsurance product. The reinsurance product is then offered to potential buyers via an electronic auction, wherein a minimum bid in the electronic auction is determined, at least in part, by the fair risk price. Bids are received from the buyers for portions of the capacity of the reinsurance product and are ranked in accordance with a calculated profitability value and/or time of receipt. Buyers are notified of a status of their respective bids, and particularly, whether bids have been tentatively accepted, partially accepted, or excluded, i.e., rejected. Upon notification of bid status, buyers are given the opportunity to modify bid parameters in an attempt to have their bids ranked at higher a level, thereby increasing the chance of the bid being accepted.
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Citations
19 Claims
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1. A method for auctioning reinsurance products electronically over a communication network, comprising the steps of:
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identifying a reinsurance product based on information stored in a database associated with a system; determining, by a server, capacity of the reinsurance product to be sold; offering, by the server, the reinsurance product for sale through an auction; accepting, by the server, bids from reinsurees for at least a portion of the capacity, wherein the step of accepting bids includes, providing, through the communication network, a status for the bids of the reinsurees, the status comprising one of OK, Partial OK, and Excluded, the status OK representing that a bid will be accepted the status Partial OK representing that only a portion of the capacity in a bid will be filled, and the status Excluded representing that a bid will not been accepted, and ranking, by an auction ranking element engine, the bids of the reinsurees, wherein the ranking of the bids at least considers a calculated profitability value and a time stamp associated with each of the bids an older time stamp resulting in a higher ranking for a given bid and a higher calculated profitability resulting in a higher ranking for a given bid, and where profits for a provider of the reinsurance product are maximized by selecting from pending and newly entered bids, the bids that are most profitable; setting, by the server, a reference price for the reinsurance product; defining, by the server, a ratio of a bid to the reference price that defines a variable index; using, by the server, the variable index to define profitability, wherein remaining capacity of the reinsurance product is sold when the variable index is below 1; electronically consummating a contract, using the communication network, for the sale of at least a portion of the reinsurance product to holders of winning bids, and assigning each of the winning bids a status of OK denoting denotes acceptance of a bid, or a status of Partial OK denoting only a portion of requested capacity will be filled; and ending, by the server, the on-line auction in response to a determination that the capacity is consumed or a predefined date and time is reached, even if all of the capacity has not been sold. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11)
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12. An online system for auctioning a reinsurance product electronically over a communication network, comprising:
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a fair risk price calculator; an auction and auction participant database; an auction ranking element engine; and a web server in communication with the Internet, wherein the fair risk price calculator provides information for calculating a minimum bid, the database stores information related to at least one auction for at least one reinsurance product, and the auction ranking element engine is operable to rank bids submitted to the database via the web server from reinsurees, wherein the ranking of the bids of the reinsurees at least considers a calculated profitability value and a time stamp associated with each of the bids an older time stamp resulting in a higher ranking for a given bid and a higher calculated profitability resulting in a higher ranking for a given bid, and where profits for a provider of the reinsurance product are maximized by selecting from pending and newly entered bids, the bids that are most profitable, wherein the web server sets a reference price for the reinsurance product, defines a ratio of a bid to the reference price that defines a variable index, and uses the variable index to define profitability, wherein remaining capacity of the reinsurance product is sold when the variable index is below 1; and wherein the auction ranking element engine provides a status of a bid, and wherein a status of OK denotes acceptance of a bid, a status of Partial OK denotes only a portion of requested capacity will be filed, and a status of Excluded denotes that a bid has not been accepted, and the web server ends the on-line auction in response to a determination that the capacity is consumed or a predefined date and time is reached, even if all of the capacity has not been sold. - View Dependent Claims (13, 14, 15, 16, 17, 18, 19)
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Specification