Extended value and risk management system

• US 20090043637A1
• Filed: 05/31/2005
• Published: 02/12/2009
• Est. Priority Date: 06/01/2004
• Status: Abandoned Application

• Current Assignee: Jeffrey Eder
• Original Assignee: Jeffrey Eder
• Inventors: Eder, Jeff Scott
• Application Number:
  US11/142,785
• Publication Number:
  US 20090043637A1
• Time in Patent Office: Days
• US Class Current: 705/10
• CPC Class Codes: G06N 20/00 Machine learning
• CPC Class Codes: G06N 7/01 Probabilistic graphical models, e.g. probabilistic networks
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
• CPC Class Codes: G06Q 10/067 Enterprise or organisation modelling
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method of and system for creating an organization risk matrix and an organization value matrix and using said matrices to support the management and optimization of one or more aspects of organization risk and value, the development and optimized delivery of standard and customized risk transfer products for one or more organizations, and the development, valuation and sale of securities for one or more organizations.

Claims

1. A computer implemented risk method, comprising:

preparing data representative of an organization from a plurality of organization management systems for use in processing,

transforming at least a portion of the data into a matrix of organization value that determines a value of each of one or more elements of value and each of one or more external factors that contribute to a value of each of one or more segments of organization value,

quantifying a plurality of risks for the organization as a whole and for one or more segments of value for an organization where the segments of value are derivatives, market sentiment, real options and combinations thereof by using said matrix to simulate organization performance under an extreme scenario, and

using at least one of the quantified risks to identify and output a customized risk transfer program for the organization

where the customized risk transfer program comprises a set of risk transfer transactions that minimize organization risk for the extreme scenario and an index for at least one type of risk transfer transaction,

where said index does not comprise a weather index, and

where a plurality of organization management systems comprise a basic financial system, at least one risk management system and optionally one or more asset management systems.

2. The method of claim 1 that further comprises identifying an optimal set of risk transfer transactions for an organization using said quantifications where an optimal set of transactions is the set of risk transfer transactions that minimizes risk for a given level of value.

3. The method of claim 2 where an optimal set of risk transfer transactions are optionally implemented in an automated fashion.

4. The method of claim 1 where a set of risk transfer transactions are selected from the group consisting of swap transactions, swaption transactions, swap stream transactions, derivative transactions, hybrid security transactions, securitized risk transactions, standard insurance policy transactions, custom insurance policy transactions and combinations thereof.

5. The method of claim 2 where a set of risk transfer transactions are optimized for a given scenario and the scenarios are selected from the group consisting of normal scenarios, extreme scenarios, scenarios defined by regulations and combinations thereof.

6. The method of claim 1 where a plurality of risks that are being quantified are selected from the group consisting of contingent liabilities, event risks, market volatility, variability risks and combinations thereof.

7. The method of claim 1 where a plurality of risks are further quantified by element of value and external factor where elements of value are selected from the group consisting of alliances, brands, buildings, cash, channels, customers, customer relationships, employees, equipment, knowledge, intellectual property, inventory, investors, partnerships, processes, products, quality, technology, vendors, vendor relationships, visitors and combinations thereof and external factors are selected from the group consisting of commodity prices, inflation rate, gross domestic product, volatility, interest rates, insider trading, consumer confidence, organization performance against expectations, the unemployment rate and combinations thereof.

8. A computer readable medium having sequences of instructions stored therein, which when executed cause the processors in a plurality of computers that have been connected via a network to perform an organization method, comprising:

preparing data from a plurality of organization related systems for use in processing,

developing a computational model of organization market value by segment of value, element of value and external factor by completing a series of multivariate analyses in an automated fashion using at least a portion of the data,

using said model to quantify a plurality of risks for the organization as a whole and develop a customized risk transfer program for the organization and complete one or more useful activities selected from the group consisting of;

identifying an efficient frontier for organization financial performance, quantifying a plurality of risks by element of value, quantifying a plurality of risks by segment of value, quantifying a plurality of risks by external factor, identifying a target share price for organization common stock, identifying one or more changes that will optimize one or more aspects of organization financial performance, calculating a net contribution of each element of value to an organization market value, calculating a net contribution of each external factor to an organization market value, calculating a value for each element of value, calculating a value impact for a plurality of risk management activities, valuing organization common stock, creating one or more hybrid securities, developing a matrix of value, developing a matrix of risk, creating one or more customized risk transfer products and combinations thereof, and

displaying one or more results from said one or more useful activities using a paper document or electronic display

where the customized risk transfer program comprises one or more securitized risk contracts, one or more hybrid securities or a combination thereof, and

where the quantified risks are contingent liabilities, event risks, market volatility risks, variability risks and combinations thereof.

9. The computer readable medium of claim 8 where wherein a series of multivariate analyses are selected from the group consisting of identifying one or more previously unknown item performance indicators, discovering one or more previously unknown value drivers, identifying one or more previously unknown relationships between one or more value drivers, identifying one or more previously unknown relationships between one or more elements of value, quantifying one or more inter-relationships between value drivers, quantifying one or more impacts between elements of value, developing one or more composite variables, developing one or more vectors, developing one or more causal element impact summaries, identifying a best fit combination of predictive model algorithm and element impact summaries for modeling enterprise market value, select segments of value and each of the components of value, building predictive models using transaction data, determining a net tangible element of value impact on each segment of value, determining a relative strength of the elements of value between two or more enterprises, developing one or more real option discount rates, calculating one or more real option values, calculating one or more derivative values, calculating an enterprise market sentiment value by element of value, developing a covariance matrix, developing a series of scenarios, simulating an organization financial performance under a given scenario, simulating a financial service provider performance under a given scenario, identifying an efficient frontier for organization financial performance and combinations thereof.

10. The computer readable medium of claim 8 wherein one or more aspects of organization financial performance are selected from the group consisting of revenue, expense, capital change, market value, current operation value, derivative value, investment value, market sentiment value, real option value, risk management activity, total risk, common stock price, alliance risk, brand risk, channel risk, content risk, contingent liabilities, customer risk, customer relationship risk, current operation risk, derivative risk, employee risk, employee relationship risk, energy risk, enterprise risk, external factor risk, event risk, information technology risk, intellectual capital risk, intellectual property risk, investment risk, knowledge risk, market sentiment risk, market risk, market volatility, organization risk, partnership risk, process risk, production equipment risk, product risk, project risk, real option risk, technology risk, vendor risk, vendor relationship risk, weather risk, alliance value, brand value, capital value, channel value, content value, contingent liabilities, customer value, customer relationship value, current operation value, derivative value, employee value, employee relationship value, enterprise value, expense value, external factor value, event value, information technology value, intellectual capital value, intellectual property value, investment value, knowledge value, market sentiment value, market value, market volatility, organization value, partnership value, process value, production equipment value, product value, project value, real option value, revenue value, technology value, vendor value, vendor relationship value and combinations thereof.

11. The computer readable medium of claim 8 wherein preparing data from a plurality or organization related systems for use in processing further comprises converting and storing a plurality of enterprise related data from a plurality of organization related systems in accordance with an rdf, xml or metadata coalition metadata standard.

12. The computer readable medium of claim 8 where elements of value are selected from the group consisting of alliances, brands, buildings, cash, channels, customers, customer relationships, employees, equipment, knowledge, intellectual property, inventory, investors, partnerships, processes, products, quality, technology, vendors, vendor relationships, visitors and combinations thereof.

13. The computer readable medium of claim 8 where segments of value are selected from the group consisting of current operation, derivatives, investments, market sentiment, real options and combinations thereof.

14. A computer implemented analysis method, comprising:

obtaining data regarding existing investments and liabilities for a financial service provider, preparing data from a plurality of client organization management systems for use in processing,

quantifying a value and a plurality of risks for one or more segments of value and the organization as a whole for a plurality of client organizations where the segments of value are derivatives, market sentiment, real options and combinations thereof using at least a portion of said data, and

analyzing the combined data as required to develop a customized risk transfer program for each client organization and complete activities selected from the group consisting of;

identify an optimal set of financial service transactions for each client organization, identify a plurality of financial service transaction price levels that optimize value for the financial service provider and identify a set of changes in financial service provider capital structure that will optimize performance

where the customized risk transfer program comprises one or more securitized risk contracts, one or more hybrid securities or a combination thereof.

15. The method of claim 14 where financial service transactions are selected from the group consisting of risk transfer transactions, loans, swaps, swaptions, swap streams, shorts and combinations thereof.

16. A computer readable medium having sequences of instructions stored therein, which when executed cause the processors in a plurality of computers that have been connected via a network to perform an organization method, comprising:

preparing data representative of an organization from a plurality of organization management systems for use in processing for one or more organizations,

transforming at least a portion of the data into a matrix of value for each organization that determines a value of each of one or more elements of value and each of one or more external factors that have a tangible impact on one or more segments of organization value quantifying a plurality of risks for each organization as a whole and for one or more segments of value within each organization by using said matrix to simulate organization performance under a normal scenario, and

analyzing the quantified risks as required to identify and output an index for at least one type of risk transfer transaction and a customized risk transfer program for each organization

where the customized risk transfer program comprises a set of risk transfer transactions that minimize organization risk and maximize organization value for the normal scenario,

where the elements of value are brands, customers and elements of value selected from the group consisting of alliances, channels, employees, equipment, knowledge, intellectual property, inventory, investors, partnerships, processes, vendors, and combinations thereof, where the segments of value are current operation, derivatives, market sentiment and real options,

where said index does not comprise a weather index, and

where a plurality of organization management systems comprise a basic financial system, at least one risk management system and optionally one or more asset management systems.

17. The computer readable medium of claim 16 that further comprises identifying an optimal set of risk transfer transactions for an organization using said quantifications where an optimial set of transactions is the set of risk transfer transactions that minimizes risk for a given level of value.

18. The computer readable medium of claim 17, wherein an optimal set of risk transfer transactions are optionally implemented in an automated fashion.

19. The computer readable medium of claim 16, wherein an optimal set of risk transfer transactions are selected from the group consisting of swap transactions, swaption transactions, swap stream transactions, securitized risk transactions, hybrid security transactions, derivative transactions, standard insurance policy transactions, customized insurance policy transactions and combinations thereof.

20. The computer readable medium of claim 17, wherein a set of risk transfer transactions are optimized for a given scenario and the scenarios are selected from the group consisting of normal scenarios, extreme scenarios, scenarios defined by regulations and combinations thereof.

21. The computer readable medium of claim 16, wherein a plurality of risks that are being quantified are selected from the group consisting of contingent liabilities, event risks, market volatility, variability risks and combinations thereof.

22. The computer readable medium of claim 16, wherein a plurality of risks are further quantified by element of value and external factor and external factors are selected from the group consisting of commodity prices, inflation rate, gross domestic product, volatility, interest rates, insider trading, consumer confidence, organization performance against expectations, the unemployment rate and combinations thereof.

23. A risk transfer system, comprising:

networked computers each with a processor having circuitry to execute instructions;

a storage device available to each processor with sequences of instructions stored therein, which when executed cause the processors to;

prepare data representative of an organization from a plurality of organization management systems for use in processing for one or more organizations,

transform at least a portion of the data into a matrix of value for each organization that identifies a contribution of each of one or more elements of value and each of one or more external factors that have a tangible impact on one or more segments of organization value quantify a plurality of risks for each organization as a whole and for one or more segments of value for each organization by using said matrix to simulate organization performance under a normal scenario and an extreme scenario, and

analyze the quantified risks as required to identify and output an index for at least one type of risk transfer transaction and a customized risk transfer program for each organization for each scenario

where the customized risk transfer program comprises a set of risk transfer transactions that minimize organization risk and maximize organization value for the chosen scenario, where the elements of value are brands, customers and elements of value selected from the group consisting of alliances, channels, employees, equipment, knowledge, intellectual property, inventory, investors, partnerships, processes, vendors, and combinations thereof,

where the segments of value are current operation, derivatives, market sentiment and real options,

where said index does not comprise a weather index, and

where a plurality of organization management systems comprise a basic financial system, at least one risk management system and optionally one or more asset management systems.

24. The system of claim 23 that further comprises identifying an optimal set of risk transfer transactions for an organization using said quantifications where an optimial set of transactions is the set of risk transfer transactions that minimizes risk for a given level of value.

25. The system of claim 24, wherein an optimal set of risk transfer transactions are optionally implemented in an automated fashion.

26. The system of claim 23, wherein an optimal set of risk transfer transactions are selected from the group consisting of swap transactions, swaption transactions, swap stream transactions, securitized risk transactions, hybrid security transactions, derivative transactions, standard insurance policy transactions, customized insurance policy transactions and combinations thereof.

27. The system of claim 24, wherein a set of risk transfer transactions are optimized for a given scenario and the scenarios are selected from the group consisting of normal scenarios, extreme scenarios, scenarios defined by regulations and combinations thereof.

28. The system of claim 23, wherein a plurality of risks that are being quantified are selected from the group consisting of contingent liabilities, event risks, market volatility, variability risks and combinations thereof.

29. The system of claim 23, wherein a plurality of risks are further quantified by element of value and external factor and external factors are selected from the group consisting of commodity prices, inflation rate, gross domestic product, volatility, interest rates, insider trading, consumer confidence, organization performance against expectations, the unemployment rate and combinations thereof