METHOD AND SYSTEM FOR ESTIMATING ECONOMIC LOSSES FROM HAIL STORMS

1 . A system for insurance underwriting of hail risk, the system comprising:

a first data storage device having a hail event database, a roof damage database, and first program instructions, wherein the hail event database comprises data about a plurality of hail events and the roof damage database comprises data about roof types and aging thereof; and

a first processor coupled to the first data storage device, the first processor being operable to execute the first program instructions to:

receive a list of property and coverage characteristics about a property;

obtain, from the hail event database, a list of hail events within a geographic vicinity of the property,

determine a probability that the property will be hit by hail of various sizes based on the list of hail events within the geographic vicinity of the property, obtain, from the roof damage database, the expected damage from hail of various sizes based on the property's roof type and roof age,

determine expected insured losses from hail of various sizes based on the list of property and coverage characteristics, and

determine an adequate insurance premium for the property.

2 . The system of claim 1 , wherein the hail event database comprises a list of hail storms, the date of each hail storm, duration of each storm, size of hail stones produced by each storm, and geographic area covered by each storm.

3 . The system of claim 1 , wherein the list of property and coverage characteristics about the property comprises one or more of location, construction type, roof type, roof age, number of stories, deductible, and actual cash value endorsement inclusion.

4 . The system of claim 1 , wherein the hail event database and the roof damage database are located on separate data storage devices, each being coupled to the processor.

5 . The system of claim 1 , wherein the first program instructions are further operable by the first processor to:

modify the insurance premium based on a first risk score determined by the second processor according to a modification scheme preset externally by an underwriter.

6 . The system of claim 5 , wherein the modification scheme comprises a translation table that the first processor uses to translate the first risk score into a second risk score.

7 . The system of claim 5 , wherein the modification scheme comprises a multiplier by which the first processor multiplies the first risk score by the multiplier to produce a second risk score.

8 . The system of claim 5 , wherein the modification scheme comprises a table containing a plurality of modifiers, each associated with one or more of a frequency and severity of previous losses.

9 . The system of claim 5 , wherein the modification scheme comprises a table containing a plurality of modifiers, each associated with a different roof quality.

10 . The system of claim 1 , further comprising a second processor coupled to a second data storage device containing second program instructions, the second processor being operable to execute the second program instructions to:

receive the determined insurance premium for the property, and

modify the insurance premium based on a first risk score determined by the first processor according to a modification scheme preset externally by an underwriter.

11 . The system of claim 10 , wherein the modification scheme comprises a translation table that the second processor uses to translate the first risk score determined by the second processor into a second risk score.

12 . The system of claim 10 , wherein the modification scheme comprises a multiplier, and the second processor is operable to multiply the first risk score by the multiplier to produce a second risk score.

13 . The system of claim 10 , wherein the modification scheme comprises a table containing a plurality of modifiers, each associated with one or more of a frequency and severity of previous losses.

14 . The system of claim 10 , wherein the modification scheme comprises a table containing a plurality of modifiers, each associated with a different roof quality.