# US 8,543,427 B2 · Weather risk management system

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- Number: US 8,543,427 B2
- Document ID: US8543427B2
- Status: Granted
- Kind: B2
- Application number: 12/610,514
- Filed: 2009-11-02
- Published: 2011-05-05
- Granted: 2013-09-24
- Earliest claimed: 2009-11-02
- Assignees: Mac's Snow Removal, Inc.
- Applicants: William E. Noyes
- Inventors: William E. Noyes
- Web page: https://patentgrep.com/patent/US8543427B2

## CPC

- G06Q 40/08: Insurance
- G06Q 40/06: Asset management; Financial planning or analysis
- G06Q: INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR

## Abstract

This disclosure relates to a system for managing financial risk associated with weather-based service contracts, and more specifically, to a system based on the purchase of weather derivatives to select, manage, minimize, and redistribute financial burdens associated with costs incurred from the payment of services related to greater than average weather-based events. An option contract having a tick price, and an associated premium at a fixed strike price is selected at a desired coverage, in one embodiment, the desired coverage is associated with a payout with the associated tick price that covers the base price of performing the service for a nominal weather condition, the premium of buying the option, and the price of performing the services for exceptional weather precipitations of a three standard deviation from the nominal value. If a hedge trader offers this service rather than a service provider, the desired coverage will also cover the a commission for the trade.

## Claims

### Claim 1

A computer-implemented method for the risk management and cost containment of weather-related services, the method comprising:
connecting a weather risk management system implemented as a software into a memory of a computer to a computer network, the weather risk management system including a unitary event module for calculating at least a cost at a site in an area, a global module for calculating at least a base price for services at a plurality of sites from the unitary event module, and a hedge assignment module for calculating a tick price and an associated premium for the selection of an option for managing the risk and containing the cost of weather-related services, and wherein the computer network is in data communication with a weather database and a weather option database; and
entering into the weather risk management system at an interface a first site sizing data, wherein the unitary event module uploads from the weather database a yearly estimate for the first site and the hedge assignment module uploads from the weather option database a strike price, and the associated premium for the option at a calculated tick size.

### Claim 2 (depends on 1)

The computer-implemented method of claim 1, further comprising the step of entering at the interface a correction factor for at least the first site into the global module for correcting the base price.

### Claim 3 (depends on 1)

The computer-implemented method of claim 1, wherein the hedge assignment module calculates the tick price from a ultimate coverage desired that is associated with a yearly precipitation of twice the nominal precipitation.

### Claim 4 (depends on 1)

The computer-implemented method of claim 1, wherein the ultimate coverage desired is calculated to be an annual effective precipitation of three standard deviations.