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Developments In Indian Weather Markets WRMA May
2007
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Where are the world weather markets?
Active growing
Emerging
IN GENERAL WEATHER MARKET IS CONSTRAINED BY THE
AVAILABILITY AND QUALITY OF WEATHER DATA, WHICH
IS RAPIDLY IMPROVING
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Who buys weather risk management products?

• Agriculture Crop yield, handling, storage, pests
• Construction Delays, incentive/disincentive
  clauses
• Energy Reduced and/or excessive demand
• Entertainment Postponements, reduced attendance
• Governments Budget overruns
• Insurance Increased claims, premium
  diversification
• Manufacturing Reduced demand, increased raw
  material costs
• Offshore Storm frequency/severity
• Retailing Reduced demand of weather-sensitive
  products
• Transportation Budget overruns, delays

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What is the composition of end-user interest?
2005 Survey
2006 Survey
SOURCE 2006 WRMA SURVEY CONDUCTED BY PWC
DISTRIBUTION OF INQUIRIES ABOUT WEATHER RISK
INSTRUMENTS BY SECTOR OF POTENTIAL END-USER
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Structure of Indian Weather Market
End Users
Intermediaries
Primary
Secondary
Tertiary
Energy
Insurers Banks
Insurance Brokers Banks Inter-Dealer
Brokers Consultants
Investors
OTC CME
Energy Companies
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Where is the weather market in its life cycle?
ANNUAL GROWTH
CURRENT MARKET POSITION
INFANCY
ADOLESCENCE
MATURITY
2004
2006
???
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Indian Weather Market Customers

• Agriculture
• Weather Insurance
• Micro Policies
• Energy
• Wind Energy, Hydro Energy
• Other Renewable Energy
• Banking
• Retail Policy Outlet for Weather Insurance
• Credit Enhancement on Loan
• Government
• Subsidizing Premium
• Rain Water Harvesting Project

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Indian Weather Market Issues

• Data Deficiency
• Delayed Current Data
• Lack of quality Historical Data

Delayed Compensation

• Structuring Inefficiency
• Improper Risk Assessment
• Regulatory Restrictions
• Historical yield / production / sales data
• Low Landholdings incase of agriculture

• Impacts Penetration Levels
• Inhibits Market Development

High Risk Transfer Cost

• Inefficient Outreach
• Weather Information
• Farm Management
• Inefficient Distribution

Lack of Product Knowledge

• Customer / Risk Profile
• Large share of Rainfall Risk
• Single side Risks
• Major buyer segment is uneducated and ignorant
  about weather

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Indian Weather Market Opportunities

• Agriculture Growth Relevance to GDP
• Agriculture Makes 22 of GDP
• 65 agriculture is totally rain dependent
• Corporate Farming
• Energy
• Deregulating of Power Markets
• Renewable Energy Sources
• Secondary Weather Market
• OTC and Exchange Traded Market
• Fastest Growing Commodity Market

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Galileo Contacts
Martin Malinow, CEO W 1 212 382
1842 mmalinow_at_galileoweather.com Scott Edwards,
CFO W 1 212 382 2397 sedwards_at_galileoweather.com
Vivek Pawale, VP W 1 212 382
2392 vpawale_at_galileoweather.com Dan Tomlinson,
Director W 44 (0) 207 469 0035 dtomlinson_at_galile
oweather.com
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