Patent ID: 8463699

Claim:
A method of evaluating a book of automobile insurance business comprising: electronically obtaining information associated with a risk of loss for each automobile insurance policy in the book of business; deriving a standardized profitability equation, wherein the standardized profitability equation is: profit ⁢ ⁢ score = K 1 - K 2 ⁡ ( K 3 ⁢ ∏ i = m n ⁢ ⁢ x i + K 4 ) , where K 1 through K 4 are offset constants and x i are profitability variables; calculating with a computer an expected profitability score representative of an expected profit margin associated with a premium for each automobile insurance policy in the book of business wherein each expected profitability score is calculated using the standardized profitability equation and has a normalized value; calculating with a computer at least one descriptive statistic for the expected profitability scores; and comparing the at least one descriptive statistic with a predetermined threshold.