The Weather Risk Management Industry Survey Findings for April 2001 to March 2002

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The Weather Risk Management Industry Survey
Findings for April 2001 to March 2002
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Topics

• Objectives of Survey
• Survey Design and Implementation
• Participation
• Results
• Issues for 2003 Survey

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Objectives of Survey

• Establish size of market between April 2001 and
  March 2002
• Provide a consistent measure of market
  developments over time
• Increase awareness of market

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Survey Design and Implementation

• Presurvey (sent in February)
• Sent to All WRMA members
• Will you participate? 20 companies responded in
  2002 (19 in 2001)
• Survey (sent in April)
• 5 Pages in total (2 pages returned to PwC)
• General information about company
• Information on Contracts
• Responses confidential and destroyed once
  tabulated

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Survey Design and Implementation
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Survey Design and Implementation
Weather Events Determining Contingent Payments
Weather Measures Depending Exclusively on
Temperature Heating-degree-days measured in
Fahrenheit Heating-degree-days measured in
Celsius Cooling-degree-days measured in
Fahrenheit Cooling-degree-days measured in
Celsius Other exclusively temperature-based
measures Weather Measures Not Depending
Exclusively on Temperature Any measure based
exclusively on rainfall Any measure based
exclusively on snowfall Any measure based
exclusively on wind Any other measure, including
combinations of the above
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Survey Design and Implementation
Geographic Regions Where Weather Events are
Measured Asia Australian Continent Europe North
America, West North America, Midwest North
America, East North America, South Other
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Participation

• Accord Energy Limited (Centrica Subsidiary)
• 2. Aquila Energy
• 3. AXA Corporate Solutions
• 4. Bank of Tokyo-Mitsubishi Ltd.
• 5. BNP Paribas
• 6. Cargill Incorporated
• 7. El Paso Merchant Energy
• 8. Element Re Capital Products Inc.
• 9. Enron
• 10. Entergy-Koch (formerly Axia Energy)
• 11. Hess Energy Trading Company
• 12. Mirant Americas Energy Marketing LP
• Mitsui Sumitomo Insurance Company, Ltd. (formerly
  Mitsui Marine and Fire Insurance Company Ltd.)
• Mizuho Corporate Bank (formerly Industrial Bank
  of Japan)
• Reliant Energy Services, Inc.
• Societe Generale
• 17. Swiss Re New Markets
• The Tokio Marine and Fire Insurance Co. Ltd.
• 19. Tokyo Electric Power Company, Inc.

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Participation
Participation by Main Line of Business Agricultur
e 1 Banking 4 Energy 10 Insurance 5 Other -
Participation by Location of Respondent Asia 5 E
urope 5 North America 10 Other -
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2002 Survey, General Results

• Overall, number of contracts and notional value
  higher
• Results vary by season
• Number of Winter contracts (October April) rose
• Number of Summer contracts (April October) fell
• Increasing variation in type and location of
  contracts

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Survey Results, Total Number of Contracts
3,397
2,759
1,285
695
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Survey Results, Total Notional Value
4,306
2,959
2,517
1,836
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Survey Results, Average Notional Value
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Survey Results, Number of Contracts by Type
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Survey Results, Notional Value by Type
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Survey Results, Average Notional Value by Type of
Contract
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Survey Results, Number of Contracts by Region
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Survey Results, Notional Value by Region
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Survey Results, Average Notional Value by Region
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Survey Results, Share of Counterparties Not
Participating in Survey
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Survey Results, Share of Counterparties Not
Participating in Survey
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Issues for 2003 Survey

• Treatment of Limitless Trades
• Further Categorization of Contracts by Sector,
  such as
• Energy
• Transportation

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Questions?
John.L.Stell_at_us.pwcglobal.com 1301 K Street, NW,
Suite 800W Washington, DC 20005 202-312-7583 www.n
ec.pwcglobal.com