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Menlo Park, CA – July 12, 2000 – Risk Management Solutions
(RMS) today announced the release of Climetrix® , an Internet-based
application that provides a comprehensive range of cleaned and
enhanced weather data, sophisticated analytical tools, and portfolio
management capabilities. The application can be accessed at www.climetrix.com.
Users of Climetrix will have access to a suite of advanced
stochastic modeling tools that simulate thousands of years of
potential weather behavior to analyze and track the risk to
individual contracts and to portfolios. The wide range of
customizable features and modeling procedures reflects the input of
ten beta clients – including reinsurers and energy trading companies
active in the market – who participated in the design and testing of
the system. Users can analyze all common transaction structures and
underlying index types encountered in the market. The Climetrix
architecture uses the latest Java technology to allow immediate
deployment of sophisticated functionality through a web browser.
One key feature of Climetrix is a database of cleaned and enhanced
historical weather data developed by Earth Satellite Corporation (EarthSat)
in collaboration with RMS. The database includes 50 years of data
for approximately 200 U.S. weather stations that are most commonly
used as the basis for weather contracts. Doug Hall, CEO of EarthSat,
noted, "One major issue throughout the development of the weather
risk market has been the lack of a standardized set of data that
addresses acknowledged problems in historical data, such as
discontinuities caused by changes in weather station location or
instrumentation. Drawing on our meteorological capabilities and RMS’
analytical expertise, we have developed a unique and highly
sophisticated methodology to clean and enhance historical data that
we believe will provide a standard benchmark for the market."
"Despite significant growth of the weather market, many potential
participants have remained on the sidelines due to concerns that
they would be at a technical disadvantage relative to companies that
have developed proprietary data and trading systems," commented Paul
VanderMarck, Managing Director of the RMS Weather Risk business
unit. "We have invested more than $2 million at RMS and EarthSat
over the past year to develop a state-of-the-art system that enables
a new participant to enter the market on a level playing field with
their counterparties. We are optimistic that the availability of
such capabilities will stimulate further growth of the market."
Since its beginnings in 1997, the weather risk market has grown
rapidly as energy companies and other weather-reliant businesses
have made increasing use of weather derivatives and related
insurance contracts to hedge their risk. The market today counts a
number of leading energy trading companies, investment banks, and
reinsurers as active traders, and recent estimates indicate that
more than $5 billion of weather risk has been transacted to date.
RMS and EarthSat will be holding seminars in New York and London in
late July to introduce the Climetrix application and the EarthSat
data to clients and other interested market participants. For more
information, send email to climetrix@riskinc.com or call
1.650.617.6548.
About RMS
Risk Management Solutions is the world's leading provider of
products and services for catastrophe, weather, and enterprise risk
management. More than 400 leading insurers, reinsurers, trading
companies, and other financial institutions rely on RMS models to
quantify, manage, and transfer risk. Founded at Stanford University
in 1988, RMS serves clients today from offices in the U.S., Europe,
and Japan. For more information, visit our web site at
www.rms.com.
Climetrix, RMS, and the RMS
logo are trademarks of Risk Management Solutions, Inc. All other
trademarks are property of their respective
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