Patent ID: 7840473

Claim:
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, 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.