SYSTEM AND METHOD FOR MANAGING VARIATIONS IN PROJECT PROJECTIONS

• Main Authors: SCHUSTER RICHARD PAUL, RIGGIN DONALD J
• Format: Patent
• Language: English
• Published: 21.05.2015
• Subjects: CALCULATING; COMPUTING; COUNTING; DATA PROCESSING SYSTEMS OR METHODS, SPECIALLY ADAPTED FORADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL, SUPERVISORYOR FORECASTING PURPOSES; PHYSICS; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE,COMMERCIAL, FINANCIAL, MANAGERIAL, SUPERVISORY OR FORECASTINGPURPOSES, NOT OTHERWISE PROVIDED FOR

An insurance product provides coverage for value escalation in a highly capitalized project. One or more indices are used to obtain a quantification of volatility of the value of the project over the project lifecycle. Probabilities of value changes over the project lifecycle can be generated from an index, which can be solely representative of the project value, or can be the result of combinations of one or more indices to approximate project value changes. The project value change probabilities are used to estimate an amount of insurance coverage that can be applied to cover project value changes. The party responsible for the project can purchase the insurance product with a premium derived from the amount and type of coverage tied to the index. The insurance product assists the responsible party in containing changes in project value over the course of the project life cycle.