News Release

CME Group Acquires & Renames Hurricane Index; Selects New Calculation Agent

Mon Apr 06 2009

CHICAGO, April 6 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, announced today that it has acquired the Carvill Hurricane Index from Carvill America Inc. and renamed it the CME Hurricane Index. In addition, CME Group signed a Memorandum of Understanding with EQECAT, the leading authority on extreme-risk modeling, to be the new calculation agent for the index. The hurricane futures and options contracts are listed with, and subject to, the rules and regulations of CME.

 

"We continue to be encouraged by the growth of the weather derivatives market, especially hurricane futures and options, which already have traded 4,000 contracts before the start of this year's hurricane season," said Felix Carabello, Director of Alternative Investment Products at CME Group. "As the new calculation agent for the hurricane index, EQECAT will help CME Group continue to provide innovative ways for businesses to manage their risk associated with weather events."

 

"EQECAT is very excited about supporting the CME as calculation agent for its Hurricane Index," said Dennis Kuzak, Senior Vice President of EQECAT. "And with the integration of EQECAT's risk modeling technology, we hope to increase the attractiveness of the CHI by providing superior risk metrics which would assist market participants in pricing and hedging property insurance risk."

 

CME's hurricane futures and options will be settled to the CME Hurricane Index (CHI), which provides a numerical measure of the destructive potential of a hurricane. The CHI is based on EQECAT's calculation of the maximum wind velocity and size (radius) of each official storm to calculate the potential for physical and financial damage. The higher the CHI number, the more potentially damaging the hurricane.

 

In addition to its hurricane products, CME Group offers weather contracts based on aggregate temperatures for 45 cities, including 24 throughout the U.S., 10 in Europe, six in Canada, three in Australia and two in Japan. CME Group also lists products used to hedge risk associated with snowfall and frost. For more information on CME Group weather contracts, please go to: http://www.cmegroup.com/weather.

 

EQECAT (http://www.eqecat.com) is a leading provider of state-of-the-art products and services for managing natural and manmade risks. The company meets the needs of its customers by providing innovative catastrophe management solutions for property and casualty insurance underwriting, accumulation management and transfer of natural hazard and terrorism risk.

 

CME Group (www.cmegroup.com) is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York. By acting as the buyer to every seller and the seller to every buyer, CME Clearing virtually eliminates counterparty credit risk. CME Clearing also offers financial safeguards to help mitigate systemic risk, providing the security and confidence market participants need to operate, invest and grow. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, and alternative investment products such as weather and real estate. CME Group is listed on NASDAQ under the symbol "CME."

 

The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini, CME ClearPort, CME Hurricane Index and CHI are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group and its products can be found at www.cmegroup.com.

CME-G

SOURCE: CME Group

Web site: http://www.cmegroup.com/

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