Via Fabian John, CME’s P.R. stuff:
Using publicly available data from the National Hurricane Center of the National Weather Service, the Carvill Hurricane Index (CHI(TM)) uses the maximum wind velocity and size (radius) of each official storm to calculate the potential for damage.
—
Addendum: Alexander Campbell…
So it’s not just that a hurricane risk market will help insurers on the US east coast; once the markets have been developed and the risks ironed out, the technology can and should be transferred elsewhere, to help insulate poorer economies against the risks of, for example, cyclones and floods. This would be a great place for international organisations like the World Bank and prominent aid NGOs to get involved – as the WFP has already in the Horn of Africa. Hurricanes/cyclones strike me as a good place to start – reliable windspeed and size data is more easily available from satellites than it is for, say, rainfall.
