Patent ID: 8630880

Claim:
A computer implemented insurance pricing method for generating a premium quotation for a proposed insurance policy for a property, comprising: receiving, in a computer, information identifying said property, the information including information indicative of a sensitivity of at least one constituent material of said property to a price of a commodity; receiving, in said computer, commodities futures information associated with a futures contract price for said commodity; applying, by said computer, an insurance pricing model, said insurance pricing model operating on said information indicative of a sensitivity of at least one constituent material of said property to a price of a commodity and said commodities futures information to generate a premium quotation for insuring said property, wherein said premium quotation is a function of said futures contract price, said applying comprising: determining a severity adjustment based on a change in price factor for the commodity, a proportion of a replacement cost of said property allocable to a component of the property sensitive to the commodity, and a proportion of a replacement cost of the component attributable to the commodity; and determining an overall trend of claim costs figure based on a frequency of claims trend, a severity of claims trend and the determined severity adjustment; and operating said computer to output said premium quotation for said proposed insurance policy for said property.