Wind Monitoring Stations Defied Hurricane Ike

A modeling firm said that a system of new weather stations it uses to monitor storm winds for parametric insurance kept going through Hurricane Ike when 10 government installations failed.

The announcement was made by Newark, Calif.-based RMS modeling firm, which uses hardened installations provided by WeatherFlow.

Their stations, which recorded wind speeds at seven locations in the Houston/Galveston area during Ike, support the WindX and Paradex parametric indices, which allow reinsurers and insurers to transfer risk to the capital markets based on wind speeds rather than insured losses.

Buck Lyons, chief executive officer of WeatherFlow, said that when power was cut off in the area his company's 30-foot-high anemometers kept going with backup power supplied by batteries that are charged with a solar panel array.

A flash memory system records the information when it can no longer be sent live if cellular communications are cut off.

“The stations recorded wind speed data continuously throughout the storm, in an environment where 10 of the 11 National Weather Service stations failed,” said Mr. Lyons. He said they had recorded wind gusts as high as 111 miles per hour.

The stations sited around Houston and Galveston are part of a nationwide network designed to record wind speeds in locations with the highest risk of insured loss.

“Many capital markets participants were taking a 'wait and see' approach to see if the stations would record wind speeds successfully during a hurricane,” said Peter Nakada, managing director of RMS Consulting. “The success of WindX throughout Ike will give investors the comfort to invest in WindX and Paradex transactions for the 2009 hurricane season.”

Mr. Lyons added, “We believe we have created the 'gold standard' for hurricane-force wind measurements. As well as enabling financial transactions, the data will help to advance the understanding of how hurricane-force winds behave as they move over land.”

Unlike traditional insurance, where the payoff comes after a measured amount of damage is confirmed, parametric pays off when a certified amount of wind speed, ground shake or flood water hits predetermined policy levels.