Patent ID: 6871181

Claim:
A method for determining an insurance premium paid to an insurer from a customer for a technology contract utilizing a computer platform, comprising the steps of: obtaining a price/time bid from a plurality of vendors for the performance of the contract; calculating on the computer platform an intrinsic rating P(k) for each of the vendors based upon the strength and performance of each of the vendors; calculating of the computer platform a component Q(x, k) for each vendor which quantifies the ability/suitability of a vendor to deliver on a “specific” component of said technology contract or a Request For Proposal (RFP) based on the vendor's past performance; calculating on the computer platform a component Q(x) which is the summation of the Q(x, k) and P(k); determining on the computer platform an extrinsic two-way rating Vendor Rating (VR) of each of the plurality of vendors using the equation: Two-way VR=[Q ( x, k )× P ( k )]/ Q ( x ) determining on the computer platform a default probability value P 1 for each of the vendors; determining on the computer platform a first net exposure E i for said insurer; determining a discount rate R; and calculating on the computer platform a premium paid to said insurer for each of the vendors utilizing the equation: Premium Amount=(1−Two-way VR )*Σ P i *E i /(1 +R ) t(i).