RMS and EarthSat Release Enhanced UK Weather Data

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Friday 15 June 2001

Risk Management Solutions (RMS) and Earth Satellite Corporation (EarthSat) today announced the release of enhanced historical U.K. weather data and the integration of that data into RMS' Climetrixtm weather derivatives trading and risk management system.

The new data set covers 12 weather stations throughout the U.K. and represents a major advancement in the quality of information that is available to global weather market participants.

For the past 3 years, RMS and EarthSat have collaborated on improving the reliability of the historical data used in the weather market for pricing and risk management. Over that time, the companies have jointly developed methodologies to address deficiencies in raw historical data, with a particular focus on identifying and removing the effects of measurement discontinuities caused by historical weather station events such as instrument changes and station movements. In July 2000, RMS and EarthSat released enhanced historical data for 200 U.S. weather stations, providing a reliable historical record free of the effects of measurement discontinuities.

The new U.K. data have been developed using the same analytical methodologies employed in the U.S., coupled with extensive local research by RMS and EarthSat on events that have affected U.K. weather stations. Auguste Boissonnade, Principal Scientist at RMS, said, "This is the first time that any organization, including the U.K. Met Office, has compiled complete information on the histories of individual weather stations in the U.K. With this research and accompanying statistical analysis of the data, we have identified periodic measurement discontinuities in the historical data for all of the 12 stations analyzed. Our enhanced data have been adjusted to be consistent with how weather is currently being recorded, providing a more reliable historical record for weather derivative traders and end-users."

In the U.S., recognition of the impacts of measurement discontinuities on historical data has been an important element of improved price discovery and market transparency as the weather market has grown rapidly over the past several years. More than 70% of active traders in the U.S. market utilize RMS and EarthSat's enhanced historical data as an integral part of their trading operations.

Outside of the U.S., data quality and accessibility have been major obstacles to the emergence of weather trading. Recent statistics indicate that European transactions comprise less than 2% of global weather trading volumes. Diego Wauters, Global Head of Insurance Derivatives at Sociiti Ginirale in London, said, "The release of accurate, standardized data for the U.K. is a major development for the European weather market."

In addition to the enhanced data, RMS and EarthSat will be providing clients with a cleaned database of original historical data prior to enhancement as well as with daily feeds of prior day recordings and medium-range forecasts. This suite of U.K. data has been made available to all current Climetrix licensees with the simultaneous release today of version 2.3 of the Climetrix system.

Climetrix is an Internet-based application that provides integrated access to all of the data, advanced pricing tools, and portfolio management capabilities necessary for successful participation in the weather market. The application can be accessed at www.climetrix.com.

About RMS
Risk Management Solutions is the world's leading provider of products and services for the quantification and management of natural hazard risks. RMS clients include leading insurers, reinsurers, banks, trading companies, and other financial institutions. RMS offerings include risk assessment models, software products to access the models, and consulting services. Founded at Stanford University in 1988, RMS employs over 600 people worldwide. RMS is owned by DMG Information, a division of the Daily Mail and General Trust plc media enterprise.

About EarthSat
Earth Satellite Corporation (www.earthsat.com), established in 1969, is an international consulting and professional services firm specializing in the application and development of remote sensing and geographic information technologies (GIS) to the exploration, development, monitoring and management of the Earth's resources. EarthSat's Weather Services Division has been providing weather services to the agricultural community since 1973, and has developed a role as a leader in energy weather since 1988. Based in Rockville, Maryland, EarthSat is a world leader in the utilization of remote sensing data from aircraft and satellites and is the largest value-added provider of satellite remotely sensed images. EarthSat solves information problems in oil and mineral exploration, worldwide crop monitoring, and landcover change mapping.