RMS Final Winter Regional Weather Index

April 7, 2004

California-based Risk Management Solutions (RMS), a leading provider of products and services for the management of catastrophe risk, announced that final values for its regional weather indexes show that temperatures in the winter of 2003 were near the 10-year average in all regions of the United States.

“The RMS indexes track seasonal temperatures across 10 regions of the U.S. These indexes are calculated using daily temperature values at stations that are commonly used for trading of weather derivatives,” the bulletin explained. “The indexes for this winter show that none of the 10 U.S. regions recorded a seasonal average temperature for the November 2003 to March 2004 period that differed from the average of the previous 10 winters by more than 3.5 percent. By comparison, in the previous two winters there have been eight instances when the average temperature in a region has differed from the 10-year average for that region by more than 10 percent. This includes the winter of 2001 when average temperature in the Northern Plains region of the U.S. was 21 percent warmer than the 10-year average.”

“In the past two winter seasons, most regions of the United States alternated between near-record warm and near-record cold temperatures,” commented Steve Jewson, director of RMS’ weather risk business. “This winter we saw a return to ‘normal.’ While individual months may have been colder or warmer than normal, when viewed as a whole, this winter season was not noteworthy in terms of extreme values. For example, while the Northeast experienced extremely cold weather in mid to late January, this was offset by unseasonably warm weather during the second halves of November and December — yielding a relatively ‘average’ winter when viewed as a whole.”

RMS tracks 10 regions in the U.S. – the Northeast, Mid- Atlantic, Southeast, Midwest, Northern Plains, Plains, South Central, Pacific Northwest, Mountain States, and Southwest. It will start tracking values of the regional weather indexes for the May to September summer season on May 2.

“All final index values and the record of their day-by-day progression through the winter season can be viewed on www.climetrix.com, RMS’ weather risk web site,” said the bulletin. Climetrix is an Internet-based application that provides integrated access to all of the data, pricing tools, and portfolio management capabilities necessary for successful participation in the weather market.

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