Financial Impact Prediction System Using Recurrence Intervals

Solution Overview

Problem

Current methods for predicting the financial impact of weather, environmental, and geologic events rely on subjective human determinations, which are time-consuming, inconsistent, and dependent on individual skill levels, lacking objective mathematical rules.

Innovation Solution

A system that uses specific mathematical rules to predict the financial impact of environmental or geologic events by determining recurrence intervals, correlating past conditions with financial impacts, calculating predicted impacts, grouping events, setting thresholds, and comparing forecasted conditions to these thresholds.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If human experts make subjective determinations to predict financial impact, then the predictions can capture nuanced contextual understanding, but the process becomes time-consuming and inconsistent

Engineering Contradiction:

Improveprediction accuracyVSAvoidprediction time

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The patent replaces the mechanical system of human expert judgment with an automated computational system that uses mathematical rules and algorithms to predict financial impact. The system processes historical data, determines recurrence intervals, and calculates predicted impacts without human intervention, thereby eliminating time consumption and inconsistency while maintaining prediction capability through objective mathematical relationships.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The system enables self-service by allowing historical data to automatically generate prediction models and thresholds without requiring continuous human expert analysis. The automated system uses stored historical event data to independently determine recurrence intervals, establish correlation relationships, and generate predictions for new events, making the prediction process autonomous and efficiently reusable.

Inventive Principle:

Principle #25Self-service

2Adaptability or versatility

If human experts make subjective determinations, then flexible judgment can be applied to complex scenarios, but consistency and reliability of predictions deteriorate

Engineering Contradiction:

Improvejudgment flexibilityVSAvoidprediction consistency

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The patent transforms the subjective judgment process into objective parameter-based calculations. Instead of relying on expert discretion, the system changes the approach to using measurable parameters such as recurrence intervals, historical impact data, and statistical correlations. These parameters are systematically processed through mathematical rules to produce consistent and reliable predictions across different scenarios.

Inventive Principle:

Principle #35Parameter changes

Solution Approach 2:

The patent replaces the mechanical system of human expert judgment with an automated computational system that uses mathematical rules and algorithms to predict financial impact. The system processes historical data, determines recurrence intervals, and calculates predicted impacts without human intervention, thereby eliminating time consumption and inconsistency while maintaining prediction capability through objective mathematical relationships.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Measurement precision

If subjective human determinations are used, then individual expertise can be leveraged, but the complexity and difficulty of the prediction process increases

Engineering Contradiction:

Improveprediction accuracyVSAvoidprediction system complexity

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The patent segments the complex prediction process into distinct modular components: data collection, recurrence interval determination, correlation analysis, threshold establishment, and prediction calculation. Each component handles a specific aspect of the prediction task using standardized procedures, reducing overall system complexity while maintaining prediction accuracy through systematic decomposition of the problem.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent transforms the subjective judgment process into objective parameter-based calculations. Instead of relying on expert discretion, the system changes the approach to using measurable parameters such as recurrence intervals, historical impact data, and statistical correlations. These parameters are systematically processed through mathematical rules to produce consistent and reliable predictions across different scenarios.

Inventive Principle:

Principle #35Parameter changes

Data Source

PatentUS11112534B2Method and system for predicting the financial impact of environmental or geologic conditions

Publication Date: 2021.09.07 ACCUWEATHER INC

AI summary

A system and method of predicting the financial impact of environmental or geologic events (that include one or more environmental or geologic conditions) by determining a recurrence interval of each past condition in each location, determining the correlation between the past condition and the observable financial impact of the past event, calculating a predicted observable financial impact of each past event, calculating a predicted financial impact of each past event recurring by multiplying the predicted observable financial impact of the past event by the recurrence interval of the past condition, grouping the past events into a plurality of groups based on the predicted financial impact of the past condition recurring, determining a threshold for each group, identifying current or forecasted conditions, and determining the predicted financial impact of the current or forecasted conditions by comparing the current or forecasted conditions with the thresholds.